Can you explain the difference between capital and revenue items of expenditure and income?

Having trouble please explain! What are the earnings per share if Fincorp, Inc has 500,000 shares outstanding?

• The table below contains data on Fincorp, Inc., the balance sheet items correspond to values at year-end of 2010 and 2011, while the income statement items correspond to revenues or expenses during the year ending in either 2010 or 2011. All values are in thousands of dollars. 2010 2011 Revenue $3,400 $3,500 Cost of goods sold 1,300 1,400 Depreciation 440 460 Inventories 380 510 Administrative expenses 440 490 Interest expense 90 90 Federal and state taxes* 340 360 Accounts payable 380 510 Accounts receivable 496 610 Net fixed assets† 4,400 5,140 Long-term debt 1,400 1,800 Notes payable 1,080 760 Dividends paid 290 290 Cash and marketable securities 740 240

• Answer:

  Earnings per share is calculated as: (Net Income - Preferred Dividends) / Avg. Outstanding Shares . . . . . . . . . . . . . . . . . . 2010 . .2011 Revenue . . . . . . . . . . .$3,400 $3,500 Less: Cost of goods sold . . . . . 1,300 1,400 Depreciation . . . . . . . . . . .440 . .460 Administrative expenses . . 440 . .490 Interest expense . . . . . . . . .90 . . 90 Federal and state taxes* . . 340 . 360 Net Income . . . . . . . . . . .$790 . $700 in thousands of dollars: . . . . . . . . . . . . . . . . .$790,000 . $700,000 790,000 / 500,000 = $1.58 EPS for 2010 700,000 / 500,000 = $1.40 EPS for 2011