Trend Analysis: Net Income and EPS
Equity Cushion Co. reports the following items in its financial statements:
|
1998 |
1999 |
|
|
Net income |
$16,000,000 |
$24,000,000 |
|
Common shares outstanding |
1,000,000 shares |
1,200,000 shares |
Required
a. Determine the firm’s earnings per share (EPS) in both 1998 and 1999.
b. Determine the percentage change in net income and EPS from 1998 to 1999.
c. Based on your answers to part b, what would you expect Equity Cushion’s net income and EPS to be in 2000? Clearly state any assumptions made in developing your answers.