Question

The Fitness Studio, Inc.’s 2018 income statement lists the following income and expenses: EBIT = $778,000,...

The Fitness Studio, Inc.’s 2018 income statement lists the following income and expenses: EBIT = $778,000, interest expense = $190,000, and taxes = $205,800. The firm has no preferred stock outstanding and 100,000 shares of common stock outstanding.

Calculate the 2018 earnings per share. (Round your answer to 2 decimal places.)

Homework Answers

Answer #1

The Net profit for fitness studio from the business operations is as follows

Fitness Studioo Inc 2018

1

EBIT

$        7,78,000.00

2

INTEREST EXPENSE

$      -1,90,000.00

3

TAXES

$      -2,05,800.00

4

Net profit

$        3,82,200.00

EPS = Net income – Preferred dividends / no of shares outstanding

Since it has no preferred stocks, no p.dividends have been distributed

So

EPS = 382200/ 100,000 = 3.82

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