The Fitness Studio, Inc.\'s, 2015 income statement lists the following income an

Question

The Fitness Studio, Inc.'s, 2015 income statement lists the following income and expenses: EBIT = $779,000, interest expense = $210,000, and taxes =$199,150. The firm has no preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the 2015 earnings per share. (Round your answer to 2 decimal places.) Tater and Pepper Corp. reported sales for 2015 of $28 million. Teter and Pepper listed $6.1 million of inventory on its balance sheet. How many days did Tater and Pepper's inventory stay on the premises? How many times per year did Tater and Pepper's inventory turn over?

Explanation / Answer

1)

Earning Available to Equity Shareholder = EBIT - Interest expenses - Taxes - prefered stock dividend

Earning Available to Equity Shareholder = 779000 - 210000 - 199150 - 0

Earning Available to Equity Shareholder = $ 369,850

Earning Per Share = Earning Available to Equity Shareholder /Number of Outstanding Share

Earning Per Share = 369850/100000

Earning Per Share = $ 3.70

2)

Day's Sales in Inventory = Inventory/Sale * 365

Day's Sales in Inventory = 6.1/28 *365

Day's Sales in Inventory = 79.52 Days

Note : In formula Day's Sales in Inventory if cost of good sold is not given than Sale is being used

3)

Inventory Turnover = Sale/Inventory

Inventory Turnover = 28/6.1

Inventory Turnover = 4.59 times

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