Using the income statement here http://investors.cvshealth.com/~/media/Files/C/C
ID: 342151 • Letter: U
Question
Using the income statement here http://investors.cvshealth.com/~/media/Files/C/CVS-IR-v3/reports/annual-report-2016.pdf
EPS is an important item on the income statement. It is an indicator of the firm’s financial performance. Some investment evaluation models relate changes in EPS to the changes in stock prices such as E/P ration (where E is earnings per share and P is stock price).
1) What is EPS for your company?
Previews year: ________
Current year: _________
2) Show how these numbers are calculated. (There are two types of EPS: simple and fully diluted. Use simple EPS for this report)
3) What can you infer from the change in EPS?
Explanation / Answer
Previous year 2015 EPS- 4.66
Current Year EPS-4.93
EPS is calculated by dividing the Net Income by weighted average shares outstanding
2015 EPS=5237/1118 =4.66
2016 EPS=5317/1073=4.93
Earnings Per share indicates the income on each share. When EPS changes , it indicates either an increase or decrease in the overall profitability or changes in the weighted average number of shares due to issuance/buyback of shares.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.