Don Wants to Compute the Earnings Per Share for SFX

question 246

Multiple Choice

Don wants to compute the earnings per share for SFX Ltd. How does he do it?

• A) Divide sales by the number of common shares outstanding
• B) Divide cost of goods sold by the number of common shares
• C) Divide net income by the number of common shares outstanding
• D) Divide cost of goods sold by average inventory
• E) Divide net income by sales

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choice.

Consumption Time

The duration or period during which a consumer utilizes or enjoys a product or service.

Opportunity Cost of Time

The cost associated with forgoing the next best alternative when one chooses to spend time on a specific activity.

Consumption Time

The period during which consumers use or enjoy a good or service.