Question

Last year XYZ company had a net profit of $6.4 million, year end total assets of $90 million, year end total debt of $55 million, a book value per share of $6.50 and shareholders equity of $32.5 million. Based on this information, the company's earnings per share (EPS) was;

Answer 1

Book value per share			Shareholders equity/Number of outstanding shares
Number of outstanding shares			Shareholders equity/Book value per share
Number of outstanding shares			32.5 million/6.50
Number of outstanding shares			5 million
Net profit			6.4 million
Earnings per share			Net profit/Number of outstanding shares
Earnings per share			6.4 million / 5 million
Earnings per share			$1.28.
Based on this information, the company's earnings per share was $1.28.