Luther Corporation Consolidated Income Statement Year ended December 31 (in $mil
ID: 2656152 • Letter: L
Question
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $millions)
2006
2005
Total sales
610.1
564.9
Cost of sales
-500.2
-360.5
Gross profit
109.9
204.4
Selling, general, and
administrative expenses
-40.5
-40.5
Research and development
-24.6
-23.5
Depreciation and amortization
-3.6
-3.4
Operating income
41.2
137
Other income
--
--
Earnings before interest and taxes (EBIT)
41.2
137
Interest income (expense)
-25.1
-14.3
Pretax income
16.1
122.7
Taxes
-5.5
-42.945
Net income
10.6
79.755
Price per share
$16
$15
Sharing outstanding (millions)
10.2
8.0
Stock options outstanding (millions)
0.3
0.2
Stockholders' Equity
126.6
63.6
Total Liabilities and Stockholders' Equity
533.1
386.7
Refer to the income statement above. Luther's return on assets (ROA) for the year ending December 31, 2006 is closest to ________.
D) 1.99%
A) 24.32%
B) 6.70%
C) 20.62%
2006
2005
Total sales
610.1
564.9
Cost of sales
-500.2
-360.5
Gross profit
109.9
204.4
Selling, general, and
administrative expenses
-40.5
-40.5
Research and development
-24.6
-23.5
Depreciation and amortization
-3.6
-3.4
Operating income
41.2
137
Other income
--
--
Earnings before interest and taxes (EBIT)
41.2
137
Interest income (expense)
-25.1
-14.3
Pretax income
16.1
122.7
Taxes
-5.5
-42.945
Net income
10.6
79.755
Price per share
$16
$15
Sharing outstanding (millions)
10.2
8.0
Stock options outstanding (millions)
0.3
0.2
Stockholders' Equity
126.6
63.6
Total Liabilities and Stockholders' Equity
533.1
386.7
Explanation / Answer
Return on Assets (ROA) = Net Income / Total Assets
Return on Assets (ROA) = 10.60 / 533.1 .... (Total Assets = Total Liabilities and Stockholders' Equity)
Return on Assets (ROA) = 1.99%
D) 1.99%
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