Griffins Goat Farm, Inc., has sales of $675,000, costs of $337,000, depreciation

Question

Griffins Goat Farm, Inc., has sales of $675,000, costs of $337,000, depreciation expense of $81,000, interest expense of $50,500, a tax rate of 23 percent, and paid out $42,500 in cash dividends. The firm has 28,800 shares of common stock outstanding a. What are the earnings per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are the dividends per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Earnings per share b. Dividends per share

Explanation / Answer

Answer Q 1 Given that - i Sales $ 675,000.00 ii Cost $ 337,000.00 iii Depreciation expense $   81,000.00 iv = i-ii-iii EBIT $ 257,000.00 v Interest $   50,500.00 vi=iv-v EBT $ 206,500.00 vii=vi*23% Tax @23% $   47,495.00 viii=vi-vii Earning after tax $ 159,005.00 ix # of share out standing       28,800.00 x Dividend $   42,500.00 Answer a) EPS = Earning after tax/ Number of share outstanding = viii/ix $             5.52 Answer b) Dividend per share = Dividend/Number of share outstanding=x/ix $             1.48 Answer Q 2 i Sales $   54,000.00 ii cost $   24,600.00 iii depreciation $     2,650.00 iv Interest $     2,400.00 v = i-ii-iii-iv EBT $   24,350.00 vi=v*21% Tax @ 21% $     5,113.50 vii=v-vi Profit after tax $   19,236.50 Computation of operating cash flow i Sales $   54,000.00 ii Less : Cost $ (24,600.00) iii Less : Tax $   (5,113.50) iv=i-ii-iii Operating cash flow $   24,286.50 Hence, OCF = 24286.5

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.