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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

Operations Management Jan 16, 2021

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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