What would Mydeco's EPS have been each year in this case? Calculate the new EPS for 2016-2019 below:
What would Mydeco's EPS have been each year in this case? Calculate the new EPS for 2016-2019 below:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
See Table 2.5
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showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco's costs and expenses had been the same fraction of revenues in 2016-2019 as they were in 2015. What would Mydeco's EPS have been each year in this case?
Calculate the new EPS for 2016-2019 below: (Round dollar amounts and number of shares to one decimal place. Round percentage amount and the EPS to two decimal places.)
Transcribed Image Text:See Table 2.5
showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco's costs and expenses had been the same fraction of revenues in
2016-2019 as they were in 2015. What would Mydeco's EPS have been each year in this case?
Calculate the new EPS for 2016-2019 below: (Round dollar amounts and number of shares to one decimal place. Round percentage amount and the EPS to two decimal places.)
Year
2016
2017
2018
2019
Revenue (millions)
2$
2$
2$
%
Net Profit Margin
at
New Net Income (millions)
2$
$
$
24
ve
ivit
Shares Outstanding (millions)
2$
2$
New EPS
Transcribed Image Text:Data table
nount and
2015-2019 Financial Statement Data and Stock Price Data for Mydeco Corp.
(All data as of fiscal year end; in $ millions)
Income Statement
2015
2016
2017
2018
2019
Revenue
403.5
365.8
424.3
511.9
602.3
Cost of Goods Sold
(183.8)
(174.4)
(201.3)
(244.5)
(296.0)
Gross Profit
219.7
191.4
223.0
267.4
306.3
Sales and Marketing
(65.8)
(60.9)
(27.4)
(65.2)
(58.6)
(28.5)
(84.0)
(61.3)
(34.5)
(103.9)
(65.0)
(36.6)
(117.1)
(77.1)
(37.0)
75.1
Administration
Depreciation & Amortization
EBIT
65.6
39.1
43.2
61.9
Interest Income (Expense)
(33.2)
(34.5)
(31.0)
(35.7)
(39.8)
Pretax Income
32.4
4.6
12.2
26.2
35.3
Income Tax
(11.3)
(1.6)
(4.3)
(9.2)
(12.4)
Net Income
21.1
3.0
7.9
17.0
22.9
Shares Outstanding (millions)
Earnings per Share
Balance Sheet
56.6
56.6
56.6
56.6
56.6
$0.37
2015
$0.05
$0.14
$0.30
$0.40
2016
2017
2018
2019
Assets
Cash
49.7
71.9
90.3
81.6
87.1
Accounts Receivable
86.7
69.9
68.4
75.1
86.5
Inventory
Total Current Assets
35.2
32.3
27.7
33.7
34.1
171.6
174.1
186.4
190.4
207.7
Net Property, Plant & Equipment
Goodwill & Intangibles
247.8
242.1
305.1
342.2
349.1
359.5
359 5
359.5
359.5
359.5
Total Assets
778.9
775.7
851.0
892.1
916.3
Liabilities & Stockholders' Equity
Accounts Payable
Accrued Compensation
17.1
19.7
22.1
27.7
31.1
6.5
5.5
7.1
8.2
9.1
Total Current Liabilities
23.6
25.2
29.2
35.9
40.2
Long-Term Debt
498.6
498.6
573.7
599.8
599.8
Total Liabilities
522.2
523.8
602.9
635.7
640.0
Stockholders' Equity
256.7
251.9
248.1
256.4
276.3
Total Liabilities & Stockholders'
778.9
775.7
851.0
892.1
916.3
Statement of Cash Flows
2015
2016
2017
2018
2019
Net Income
21.1
3.0
7.9
34.5
17.0
22.9
Depreciation & Amortization
Change in Accounts Receivable
Change in Inventory
Change in Pay. & Accrued Comp.
Cash from Operations
Capital Expenditures
Cash from Investing Activ.
27.4
28.5
36.6
37.0
3.9
16.8
1.5
(6.7)
(6.0)
(11.4)
(0.4)
(2.9)
2.9
4.6
2.3
1.6
4.0
6.7
4.3
52.8
52.5
(103.5)
(103.5)
(5.7)
51.8
52.4
(40.8)
(40.8)
(6.1)
47.6
(25.1)
(25.1)
(5.7)
(24.9)
(24.9)
(5.7)
(76.7)
(76.7)
(5.7)
Dividends Paid
Sale (or Purchase) of Stock
Debt Issuance (Pay Down)
Cash from Financing Activ.
Change in Cash
Mydeco Stock Price
75.1
69.4
26.1
(5.7)
(5.7)
20.4
(8.7)
$9.62
(6.1)
5.5
21.0
22.2
18.4
$7.81
$4.28
$4.71
$9.13
Expert Solution
Step 1
Earnings per shares refers to the profit earned by each shareholder after paying all the expenses of the company. It is computed by dividing the outstanding common shares from the difference of net income and preferred dividend of the company.
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