Principles of Finance

Principles of Finance

ABC Company Income Statement ($000)
Sales revenue 112760
Cost of Goods Sold 85300
Gross Profit 27460
Operating Expenses:
Selling expense 6540
General & Administrative expenses 9400
Total Operating Expense 15940
Operating Profits (EBIT-Earnings before interest and taxes) 11520
Interest expense:
Interest on bank notes: 850
Interest on bonds: 2310
Total Interest expenses 3160
Net Profit before taxes (EBT- Earnings before taxes) 8360
Taxes 3344
Net Profit after taxes (Net Income) 5016
Earnings per share 3.86
Dividends per share 2.1538

Summary of Expenditure:
 Total Operating Expense:
Selling expense + General & Administration expense
6540 + 9400 = 15940
 Total Interest Expense :
Interest on Bank Notes + Interest on Bonds
850 + 2310 = 3160
 Net Profit before Tax :
Operating Profit – Interest
11520 – 3160 = 8360
 Net Income :
Net Profit before Tax — Tax Paid
8360 – 3344 = 5016
 Earning Per Share :
Net Income / Share Outstanding
5016 / 1300 = 3.86
 Dividend Per Share :
Dividend on Common Stock / Total Shares
2800 / 1300 = 2.1538