Question

Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:

	Dakota				Jersey
	Year 2		Year 1		Year 2		Year 1
Net income	$2,147		$3,695		$1,900		$3,192
Average number of common shares outstanding	594		599		334		363

a. Determine the earnings per share in Year 2 and Year 1 for each company. Round your answers to two decimal places.

	Year 2	Year 1
Dakota	$ per share	$ per share
Jersey	$ per share	$ per share

b. Evaluate the relative profitability of the two companies.

jersey/dakota? earnings per share for Year 1 and Year 2 are higher than jersey/dakota? . However, from Year 1 to Year 2, the earnings per share for both companies declined or improved. The slowing world economy contributed to the declines or increases from Year 1 to Year 2. Overall, jersey or dakota  appears to be the more profitable company.

Answer 1