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Assume a company's 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) Interest Income (Expense) Pre-tax Profit (Loss) Income laxes Net Profit (Loss $530,000 340,000 40,000 80,000 15,000 55,000 (10,000) 45,000 13,500 $31,500 Based on the above income statement data and assuming the company has 20 million shares of common stock outstanding, the company's operating profit margin and EPS were 10
Assume a company's 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) Interest Income (Expense) Pre-tax Profit (Loss) Income laxes Net Profit (Loss $530,000 340,000 40,000 80,000 15,000 55,000 (10,000) 45,000 13,500 $31,500 Based on the above income statement data and assuming the company has 20 million shares of common stock outstanding, the company's operating profit margin and EPS were 10.4% and $2.75 O 10.38% and $1.58 6.67% and $1.84. 8.49% and $2.25 5.94% and $1.55.
Expert Solution
Operating margin measures profitability
Operating Profit Margin = Operating Profit / Revenue = 55000/530000 *100% = 10.38%
Earnings per Share = (Net Income - Preferred Dividends)/Outstanding number of shares = (31500000-0)/20000000 = %1.58
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