Oracle reported the following earnings per share information in its 2013 annual

Question

Oracle reported the following earnings per share information in its 2013 annual report filed on Form 10-K (in millions except per share data). The company has only one class of stock outstanding. Compute basic and diluted earnings per share.

Answer:

Basic EPS = $ / = $ = $

Diluted EPS = $ / = $ = $

Net income $10,925 Dividends to common shareholders $1,433 Weighted average common shares outstanding 4,769 Dilutive effect of employee stock plans 75 Diluted weighted average common shares outstanding 4,844

Explanation / Answer

Basis EPS = Net income / Weighted average common shares outstanding

= $10,925 / 4,769

= $2.29

Diluted EPS = Net income / Diluted weighted average common shares outstanding

= $10,925 / 4,844

= $2.26

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