Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 4 - Income Statement and Related Information - Review and Practice - Questions - Page 180: 26

Answer

The increase in earnings per share is not a favorable trend.

Work Step by Step

The increase is unfavorable because extraordinary items are one-time occurrences which are not expected to reoccur in future. Thus, the earning per share before extraordinary items is more useful because it represents the yields of normal business operation and in this case, it has decreased from 7.21 to 6.40.
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