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Assume a company’s Income Statement for Year 12 is as follows:
| Income Statement Data | Year 12 (000s) |
| Net Revenues from Footwear Sales | $ 580,000 |
| Cost of Pairs Sold | 350,000 |
| Warehouse Expenses | 45,000 |
| Marketing Expenses | 90,000 |
| Administrative Expenses | 15,000 |
| Operating Profit (Loss) | 80,000 |
| Interest Income (Expense) | (20,000) |
| Pre-tax Profit (Loss) | 60,000 |
| Income Taxes | 28,000 |
| Net Profit (Loss) | $ 42,000 |
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:
A. 10.34% and $3.20
B. 7.24% and $2.20
C. 13.79% and $2.10
D. 6.67% and $2.10
E. 9.7% and $2.10
♦ Relevant knowledge
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The income statement is one of the three primary financial statements of a company. It provides a concise information on expenses, revenue as well as the residual income.
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