
Concept explainers
(a)(1)
Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.
Price/Earnings Ratio: It depicts the relation of market price of a share to earnings per share of that company. The price/earnings ratio presents the market value of the amount invested to earn $1 by a company. It is major tool to be used by investors before the decisions related to investments in a company.
To determine: The percentage increase (decrease) in (i) net sales and (ii) net income
(2)
The percentage increase in (i) total assets and (ii) total common stockholders’ equity from 2012 to 2013.
(3)
To compute: The earnings per share and price-earnings ratio for 2013.
(b)
To analyze: The ratios and increase (decrease) computed in part (a).

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Chapter 18 Solutions
Accounting Principles, Volume 2: Chapters 13 - 26
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