Earnings per Share Calculation

D

Earnings per share in this example equals sales x the estimated net profit margin/common shares outstanding = (.032 * 11.44)/.246141 = $1.49.

To calculate the estimated earnings per share (EPS), we need to use the net profit margin and the common shares outstanding.

Net profit margin is the ratio of net profit to sales, expressed as a percentage. In this case, the net profit margin is given as 3.2%.

Gross profit margin is the ratio of gross profit to sales, expressed as a percentage. In this case, the gross profit margin is given as 28.1%.

Sales are given as $11.44 billion.

Common shares outstanding are given as 246,141 million.

To calculate the net profit, we can multiply the net profit margin by the sales:

Net Profit = Net Profit Margin * Sales Net Profit = 3.2% * $11.44 billion

To calculate the gross profit, we can multiply the gross profit margin by the sales:

Gross Profit = Gross Profit Margin * Sales Gross Profit = 28.1% * $11.44 billion

The earnings per share (EPS) is calculated by dividing the net profit by the common shares outstanding:

EPS = Net Profit / Common Shares Outstanding EPS = Net Profit / (246,141 million)

Now let's perform the calculations:

Net Profit = 0.032 * $11.44 billion Net Profit = $366.08 million

Gross Profit = 0.281 * $11.44 billion Gross Profit = $3.21544 billion

EPS = $366.08 million / (246,141 million)

Now we can simplify the units:

EPS = $0.36608 billion / billion

Finally, we get the EPS in dollars by multiplying the result by 1 billion:

EPS = $0.36608

So, the estimated earnings per share is $0.36608 per share. However, none of the provided answer options match this result. Therefore, the correct answer would be B. none of these answers.