
Concept explainers
(a)
Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).
Use the following formula to compute EPS:
To determine: (a) EPS of Corporation N for 2016 and 2017 and comment on the changes in comparison to its competitor, Corporation M.
(b)
Formula of current ratio:
Debt to assets ratio: This financial ratio evaluates the ability of a company to pay off long-term debt obligations owed to creditors. This ratio assesses the solvency of a company.
Formula of debt to assets ratio:
To determine: (b) Current ratio and debt to assets ratio for 2016 and 2017.
(c)
Formula of free cash flow:
To determine: (c) Free cash flow of Corporation N for 2016 and 2017 and comment on the changes.

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Chapter 2 Solutions
FINANCIAL ACCOUNTING LOOSELEAF
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