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    Valuation: Determining Expected EPS & Growth Forecast for Ticker: WFMI (USD)

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    Please show me and explain briefly how to determine the estimated Growth Rate & EPS for "Whole Foods Markets"
    (Ticker Symbol: WFMI). [attached Excel file contains the 3 Financial Statements]

    I'd just like to see the procedure (or models) and the explanation/justification for the projected estimates you've derived.

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    Solution Preview

    Please see the attached file.

    In this type of calculation, we should not simplify the calculation and focus strictly on the basic concepts and formulae, because the financial statements can be very confusing.
    By definition, earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability.

    Calculated as: EPS = Net Income / Average Outstanding Shares

    In the EPS calculation, it is more accurate to use a weighted-average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. Please see the spreadsheet "EPS Growth" for calculation.

    2006 2005 2004 2003 2002
    Net income 203,828 136,351 129,512 98,915 79,594
    Weighted average shares outstanding 139,328 130,090 122,648 59,035 56,385
    Basic earnings per share ...

    Solution Summary

    The expected EPS and growth forecast for tickers are determined. The procedures and explanation are given.