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Lucrative Corporation
Consolidated Income Statement
Year ended December 31 (in $ millions)
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2006
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2005
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Total sales
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610.1
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578.3
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Cost of sales
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(500.2)
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(481.9)
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Gross profit
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109.9
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96.4
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Selling, general, and
administrative expenses
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(40.5)
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(39.0)
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Research and development
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(24.6)
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(22.8)
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Depreciation and amortization
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(3.6)
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(3.3)
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Operating income
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41.2
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31.3
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Other income
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---
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---
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Earnings before interest and taxes (EBIT)
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41.2
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31.3
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Interest income (expense)
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(25.1)
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(15.8)
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Pretax income
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16.1
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15.5
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Taxes
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(5.5)
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(5.3)
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Net income
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10.6
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10.2
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Price per share
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$16
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$15
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Shares outstanding (millions)
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10.2
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8.0
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Stock options outstanding (millions)
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0.3
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0.2
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Stockholders' Equity
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126.6
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63.6
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Total Liabilities and Stockholders' Equity
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533.1
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386.7
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Show computations.
[A] For the year ending December 31, 2006 calculate Lucrative's earnings per share?
[B] Suppose that Lucrative has no convertible bonds outstanding. Then for the year ending December 31, 2006 calculate Luther's diluted earnings per share?
[C] Calculate Lucrative's Operating Margin for the year ending December 31, 2005?
[D] Calculate Lucrative's Net Profit Margin for the year ending December 31, 2005?
[E] Calculate Lucrative's earnings before interest, taxes, depreciation, & amortization (EBITDA) for the year ending December 31, 2006?
[F] Calculate Lucrative's returns on equity (ROE) for the year ending December 31, 2006?
[G] Calculate Lucrative's price - earnings ratio (P/E) for the year ending December 31, 2006?
[H] If Locative's accounts receivable were $55.5 million in 2006, then compute Luther's accounts receivable days for 2006.