Basic EPS=Net income-Preferred dividendWeighted average number of common shares outstanding
Jamba juice
(2012) Basic EPS=302 000-2 181 00014 139 888=-0,133.
(2013) Basic EPS=1 492 00016 793 235=0,089.
Starbucks
(2012) Basic EPS=1 384 700 000-900 000754 400 000=1,83.
(2013) Basic EPS=8 800 000-500 000749 300 000=0,011.
Percentage of Earnings Retained
PER=Earnings per Share-Annual dividend per ShareEarnings per Share=Net Income-DividendsNet income
Jamba juice
2012 PER=302-2181302=-6,22=-622%;
2013 PER=2080-5882080=0,72=72%.
Starbucks
2012 PER=1,83-0,721,83=0,61=61%;
2013 PER=0,01-0,890,01=-88=-8800%.
Dividend Payout
DP=Annual dividend per ShareEarnings per Share=DividendsNet Income
Jamba juice
2012 DP=2181302=7,22=722%;
2013 DP=5882080=0,28=28%.
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Starbucks
2012 DP=0,721,83=0,39=39%,
2013 DP=0,890,01=89=8900%.
These three ratios are closely involved each other. For instance, the sum of the dividend payout and the percentage of earnings retained is equal to 1 or 100%. And these two ratios are computed using the fist ratio – Earnings per Share. This ratio is important and it is good when it has a positive value. We can divide a net earnings on the retained earnings and the dividends.
The earnings per share of Jamba, inc. have been increased for 2 last years, while the earnings per share of Starbucks Corporation have dropped down. Both companies pay out the dividends and the rates of these dividends are quite high. But Jamba Corporation increased their earnings and paid out a portion of the earnings, when Starbucks Corporation paid out the amount of dividends which was higher their earnings (The earnings of Starbucks were very low, but they did not want that the price of their shares was decreased). So, I think that Jamba Corporation is better for invest.
