How earnings affected by treasury stock transactions

Question

Question 1) Explain how earnings per share might be affected by treasury stock transactions.

Question 2) Calculate the ratio of debt to total assets for 2003 and 2004, and discuss the implications of the change.

                                                                        2004    2003 dollars in millions
Net Sales                                                          9614     8812
Net Earnings                                                        891     787
Total Assets                                                      10790    10143
Total Liabilities                                                    8533     8699
Common stock, $0.25 par value                            104       104
Capital in excess of par value                                 25
Retained earnings                                                2701    2248
Treasury stock, at cost                                          108      204
Number of shares outstanding (in millions)              413      410