Exercise 2-7 (Essay)
Suppose the following information is available for Callaway Golf Companyfor the years 2017 and 2016. (Dollars are in thousands, except share information.)
2017 2016
Net sales $ 1,117,204 $ 1,124,591
Net income (loss) 66,176 54,587
Total assets 855,338 838,078
Share information
Shares outstanding at year-end 64,507,000 66,282,000
Preferred dividends 0 0
2017 Earnings per share$1.01
2016 Earnings per share$0.78
There were 73,139,000 shares outstanding at the end of 2015.
1.How did the company’s profitability change from 2016 to 2017?
2.Suppose the company had paid dividends on preferred stock and on common stock during the year. How would this affect your calculation of earnings per share?
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