an analyst gathers the following information about a company: - 1997 net sales $10000000 - 1997 net profit margin 5% - 1998 expected sales growth -15% - 1998 expected profit margin 5.4% - 1998 expected common stock shares outstanding 120000 the analyst’s estimate of the company’s 1998 EPS should be closest to: a) 3.26 b) 3.72 c) 3.83 d) 4.17
c
C
Sales for 1998 = 10MM*1.15=$11.5MM NI for 1998 = 0.054*11.5 =$0.621MM EPS = 0.621/0.12 = 5.17 is 5.4% expected profit margin or profit margin will grow @ 5.4%??
how u guys get this, can advise me with explanation? cheers,
c? I get 3.825
Yes: ($10000000 x -15% x 5.4%) / 120000 = 3.825
C