Income Statement for Xenon Manufacturing: 2008 2009 Total sales 202 212 Cost of
ID: 2815079 • Letter: I
Question
Income Statement for Xenon Manufacturing:
2008 2009
Total sales 202 212
Cost of sales
minus148
minus172
Gross Profit 54 40
Selling, general,
and administrative expenses
minus22
minus20
Research and development
minus8
minus7
Depreciation and amortization
minus4
minus3
Other income 4 6
Earnings before interest
and taxes (EBIT) 24 16
Interest income (expense)
minus7
minus4
Pretax income 14 12
Taxes
minus4
minus3
Net Income 10 9
Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. If Xenon Manufacturing has
2020
million shares outstanding, what is its EPS in
20082008 ?
A.
$ 0.50$0.50
B.
$ 0.25$0.25
C.
$ 0.60$0.60
D.
$ 0.40$0.40
Explanation / Answer
A.$0.50.
EPS in 2008 = net income of 2008 / number of shares outstanding
=>$10 million / 20 million
=>$0.50 per share.