For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of $34,894,000, while Staples had a net loss of $210,706,000. OfficeMax had preferred stock of $28,726,000 with preferred dividends of $2,123,000. Staples had no preferred stock. The average outstanding common shares for each company were as follows:
Average Number of
Common Shares Outstanding
OfficeMax..............................85,881,000
Staples.............................. ...669,479,000
a. Determine the earnings per share for each company. Round to the nearest cent.
b. Evaluate the relative profitability of the two companies.