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Assume a company has 10 million shares of stock outstanding and that its Income Statement for Year 12 is as follows: Income Statement Data Year 12 (in 000s) Net Revenues from Footwear Sales $ 330,000 Cost of Pairs Sold 240,000 Warehouse Expenses 15,000 Marketing Expenses 35,000 Administrative Expenses 8,000 Operating Profit (Loss) 32,000 Interest Income (expenses) (10,000) Pre-tax Profit (Loss) 22,000 Income Taxes 6,600 Net Profit (Loss) $ 15,400 Based on the above income statement data, the company's operating profit margin and EPS are None of the above
Assume a company has 10 million shares of stock outstanding and that its Income Statement for Year 12 is as follows:
Income Statement Data |
Year 12 (in 000s) |
| Net Revenues from Footwear Sales | $ 330,000 |
| Cost of Pairs Sold | 240,000 |
| Warehouse Expenses | 15,000 |
| Marketing Expenses | 35,000 |
| Administrative Expenses | 8,000 |
| Operating Profit (Loss) | 32,000 |
| Interest Income (expenses) | (10,000) |
| Pre-tax Profit (Loss) | 22,000 |
| Income Taxes | 6,600 |
| Net Profit (Loss) | $ 15,400 |
| Based on the above income statement data, the company's operating profit margin and EPS are | ||
| None of the above. | ||
| 9.70% and $1.54. | ||
| 6.67% and $1.54. | ||
| 9.70% and $3.20. | ||
| 9.70% and $2.20. | ||
Expert Solution
Operating Profit Margin = 32000/330000*100 = 9.69% or 9.70%
EPS = Net Profit/Common Stock Outstanding = 15400000/10000000 = 1.54
Option A (9.70 and 1.54) is correct.
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