Question Details

Earnings




	In 2010, Revelation, Inc., reported the following statistics.

	2010	2009
Basic Earnings Per Share	$3.60	$2.70

In 2011, their comparative earnings per share were reported as follows.

	2011	2010	2009
Basic Earnings Per Share	$3.61	$3.00*	$2.25*

However, the note referred to by the asterisk (*) was inadvertently omitted. You are informed that the firm is basically the same and that there has been no change in accounting principle.

Required:

a.	What information should have been reported in the missing note?
b.	Should the price/earnings ratio be changed by the transaction that caused the change in earnings per share?
c.	List two other profit-related measures other than earnings per share that would be changed because of this transaction.





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