Answer parts B and C Lands' Endb. Discuss which partiesexpensing of stock options.The following information is extracted from the annual report of Lands'End (in millions, except per share data):Year 5Year 4PROBLEM 2-12Year 6Relations betweenYear 7Year 8Income, Cash Flou,and Stock PriceYear 9$ 51.0$30.6$36.1$43.7Fiscal year$64.2(26.9)$31.2121.841.434.522.4Net income74.311.8(16.1)(1.2)Cash from (used by) operations75.70.03 (86.5)(74.6)Net cash flow103.327.52.45.127.5Free cash flow*28.37514.62516.12532.375 39.31231.024.375Market price per share (end of fiscal year)Common shares outstanding30.132.433.734.835.9"Defined as Cash flow from operations- Capital expenditures- Dividends.Required:msiad Moemetsaa. Calculate and graph the following separate relations:(1) Net income per share (EPS) and marketprice per share(2) Cash from operations per share and marketprice per shareb. Which of the measures extracted from the annual report appear to best explain changes in stock price? Discussthe implications of this for stock valuation.c. Choose another company and prepare similar graphs. Do your observations from Lands' End generalize?(3) Net cash flow per share and market price per shareCHECKEPS performs best(4) Free cash flow per share and market price per shareEGO

Net income is the amount that is left over after the company has paid all its expenses including…

Answered: rts B and C

Business

Accounting

rts B and C

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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