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    Earnings Per Share and Treasury Buyback

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    1) Explain how earnings per share might be affected by treasury stock transactions.
    2) Calculate the ratio of debt to total assets for 2003 and 2004, and discuss the implications of the change.

    2004 2003 dollars in millions
    Net Sales 9614 8812
    Net Earnings 891 787
    Total Assets 10790 10143
    Total Liabilities 8533 8699
    Common stock, $0.25 par value 104 104
    Capital in excess of par value 25
    Retained earnings 2701 2248
    Treasury stock, at cost 108 204
    Number of shares outstanding (in millions) 413 410

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    Solution Preview

    Simply stated, earnings per share are determined by the number of outstanding shares. Since treasury stock is stock held by the company, then if the ...

    Solution Summary

    The relationship between earnings per share and treasury stock transactions is explained. Ratio of debt to total assets are also calculated.