Assume a company has 10 million shares of stock outstanding and that its Income

Question

Assume a company has 10 million shares of stock outstanding and that its Income Statement for Year 12 is as follows: Year 12 in 000s) Income Statement Data Net Revenues from Footwear Sales Cost of Pairs Sold Warehouse Expenses Marketing Expenses Administrative Expenses Operating Profit (Loss) nterest Income (expenses) Pre-tax Profit (Loss) ncome Taxes Net Profit Loss) $280,000 150,000 15,000 35,000 8,000 72,000 (10,000) 62,000 18,600 $43,400 Based on the above income statement data, the company's operating profit margin and EPS are -, 25.7% and $4.34. -- 18.8% and $4.34. 22.1% and $7.20. 25.7% and $7.20. c 27.5% and $4.34.

Explanation / Answer

Operating profit margin = (Operating profit/Sales)*100 = (72000/280000)*100 = 25.7%

Earning per share EPS = Net profit after tax/no of shares outstanding

EPS =43400000/10000000 = $4.34

25.7% and $4.34

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