A company has $100,000 in assets, 1000 shares outstanding, and no debt. If EBIT is $20,000, the interest rate on debt is 10% and its tax rate is 40%, then its EPS is 12 per share.
Earning Per Share (EPS) indicates the agency's profitability by means of showing how a great deal of cash a commercial enterprise makes for each proportion of its stock. The EPS parent is determined by way of dividing the employer's net income by using its outstanding shares of common inventory. however, it's miles taken into consideration the higher the EPS quantity, the more worthwhile the employer.
To find the ESP use the formula
ESP = Net Income / Common Share O/S- Net Income = 20000 - 0 -20000 * (.40) = 12000
ESP = 12000 / 1000 = 12 per share
Therefore Earning per share is 12 per share.
Earnings Before Interest and Taxes (EBIT) is a hallmark of an enterprise's profitability. EBIT may be calculated as sales minus charges with the exception of tax and hobby. EBIT is likewise referred to as running profits, operating earnings, and income before interest and taxes.
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Answer:
The entity is in its growth stage of its life cycle.
Explanation:
There are typically four stages in the life cycle of a business, the following list is arranged from when the company is new to when it starts falling:
1. Introduction Stage
2. Growth Stage
3. Maturity Stage
4. Decline Stage.
Answer:
Cam residual income 2,174,000
Phone residual loss 617,000
Explanation:
The residual income is the difference between the required return on asset and the net income.
<u>First step</u> is to calcualte the required return on the asset
we multiply each division assets by 12%
<u>then,</u> we compare with the net income to get the residual income.
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Answer:
Operating income will decrease.
Explanation:
The company's operating income is dependent on the production lines and in the short run the company might be cutting its expenses and losses by shutting down the production line but cutting a part of the company which can produce revenue is never a solution rather the company checks how they can cut down their expenses as they have unavoidable fixed expenses by this action it will seem that they will cut $21000 rental expense only and how much revenue will they will actually loose? a lot.
The company can even adjust on the space they rent or move t a cheaper cost and also work on the expenses that are unavoidable to decrease them and maximize on getting more revenue.
This is an adaptive change.
Employees are expected to adapt to the new schedules and shifting amounts of work.
