LaMont Industries had cash flow from operations of $19 300 last year. The depreciation expense was $2 300, interest expense was $600, and taxes were $1 400. They have 40 000 shares outstanding. What is the earnings per share for last year?
$0.37
To calculate earnings per share (EPS), we need to know the net income of the company. However, the question does not provide the net income directly. We can calculate the net income by deducting the expenses from the cash flow from operations.
Here's the formula to calculate net income:
Net Income = Cash Flow from Operations - (Depreciation Expense + Interest Expense + Taxes)
Substituting the given values:
Net Income = $19,300 - ($2,300 + $600 + $1,400)
Net Income = $19,300 - $4,300
Net Income = $15,000
Now that we have the net income, we can proceed to calculate the earnings per share.
Earnings Per Share (EPS) = Net Income / Number of Shares Outstanding
Given:
Net Income = $15,000
Number of Shares Outstanding = 40,000
EPS = $15,000 / 40,000
EPS = $0.375
Therefore, the earnings per share for last year for LaMont Industries was $0.375.