Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

تمرين 54

Continuing Company Analysis-Amazon and Walmart: Earnings per share
Amazon.com, Inc. is one of the largest Internet retailers in the world. Walmart is the largest retailer in the United States. Amazon and Walmart compete in similar markets; however, Walmart sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Earnings and common stock outstanding information was obtained from recent financial statements for both companies as follows (in millions):

A. Determine the earnings per share for each company. Neither company had preferred stock outstanding. (Round to the nearest cent.)
B. Which company appears more profitable from an earnings-per-share perspective?
C. The market price of Amazon common stock was $437 per share at a time when Walmart's was $72 per share. How would you explain this difference in market price given the earnings per share computed in (A) for both companies?