Question

Year ended December 31​ (in $millions) 2006 2005 Total sales 610.1 578.3 Cost of sales minus−500.2 minus−481.9 Gross profit 109.9 96.4 ​Selling, general, and administrative expenses minus−40.5 minus−39.0 Research and development minus−24.6 minus−22.8 Depreciation and amortization minus−3.6 minus−3.3 Operating income 41.2 31.3 Other income minus−minus− minus−minus− Earnings before interest and taxes​ (EBIT) 41.2 31.3 Interest income​ (expense) minus−25.1 minus−15.8 Pretax income 16.1 15.5 Taxes minus−5.5 minus−5.3 Net income 10.6 10.2 Price per share ​$16 ​$15 Sharing outstanding​ (millions) 10.210.2 6.66.6 Stock options outstanding​ (millions) 0.20.2 0.30.3 ​Stockholders' Equity 126.6 63.6 Total Liabilities and​ Stockholders' Equity 533.1 386.7 Refer to the income statement above. For the year ending December​ 31, 2006​ Luther's earnings per share is closest to​ ________.

Answer 1

Answer:

Luther's earnings per share is closest to $1.03

Explanation:

The formula to compute the earning per share is shown below:

Earning per share = (Net income) ÷ ( number of outstanding shares)

where,

Net income is $10.6 million

And, the number of outstanding shares is $10.2 million

Now put these values to the above formula  

So, the value would equal to

= $10.6 million ÷ $10.2 million

= $1.03