Calculating Annual Growth Rate of Earnings Per Share for Microsoft Corp.

What was the annual growth rate of earnings per share for Microsoft Corp. from 2009 to 2019?

Answer:

The annual growth rate of earnings per share over this period is approximately 14.77%. This means that the EPS grew at an average rate of 14.77% per year from 2009 to 2019.

Calculating the Annual Growth Rate:

The annual growth rate of earnings per share (EPS) can be calculated using the formula:

Annual growth rate = [(Ending EPS / Beginning EPS)^(1/number of years)] - 1

In this case, the beginning EPS is $1.62 in 2009 and the ending EPS is $5.06 in 2019. The number of years is 2019 - 2009 = 10.

Plugging in the values into the formula, we have:

Annual growth rate = [(5.06 / 1.62)^(1/10)] - 1

Calculating this expression, we find:

Annual growth rate ≈ 0.1477 or 14.77%

By using the formula mentioned above, we can determine the annual growth rate of earnings per share for Microsoft Corp. over the specified period. This calculation helps in understanding how the company's earnings per share have been increasing over time.

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