Unit 7 Assignment 5– Compute Earnings Per Share

AC216Unit7Assignment5-EarningsPerShare.xlsx

Problem 5

Calcualte the Profit Margin, Earnings per share and Price Earnings Ratio for each of these three companies.
	Financial Data presented in Millions.
	Market Price	42.5	15.95	107
	Shares outstanding	5	12	8
	Income Statement	Yakima	Snake	Columbia
	Sales	110.0	200.0	50.0
	Cost of Goods Sold	55.0	70.0	10.0
	Gross Margin	55.0	130.0	40.0
	Selling and Admin	13.8	39.0	8.0
	Income from Operations	41.3	91.0	32.0
	Interest Expense	3.0	15.0	7.0
	Earnings before taxes	38.3	76.0	25.0
	Income tax expense	8.42	16.72	5.50
	Net income	29.84	59.28	19.50
	Profit Margin
	Earnings Per share
	Price Earnings
	Essay questions:
1	Why is Columbia's Earnings Per Share so low when they have the highest Profit Margin?
	And Conversly Yakima has the higest Earnings Per Share with the lowest profit margin. Explain this.
2	Comment on each company's Price Earnings Ratio