Exam 14: Financial Statement Analysis

Financial statements for Larned Company appear below: Shareholders' Equity: Larned Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2930 Costs of Goods Sold \ 2050 Gross Margin \ 880 Operating Expenses \ 350 Net Operating Income \ 530 Interest Expense \ 40 Net Income before Taxes \ 490 Income Taxes (30\%) \ 147 Net Income \ 343 Total dividends during Year 2 were $\$ 263,000$ , of which $\$ 12,000$ were for preferred shares. The market price of a common share on December 31, Year 2 was $\$ 160$ . -Larned Company's book value per share at the end of Year 2 was closest to which of the following?

Financial statements for Laroche Company appear below: Shareholders' Equity: Larned Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (All on Account) \ 2250 Costs of Goods Sold \ 1570 Gross Margin \ 680 Operating Expenses \ 270 Net Operating Income \ 410 Interest Expense \ 30 Net Income before Taxes \ 380 Income Taxes (30\%) \ 114 Net Income \ 266 Total dividends during Year 2 were $\$ 166,000$ , of which $\$ 10,000$ were preferred dividends. The market price of a common share on December 31, Year 2 was $\$ 150$ . -Laroche Company's book value per share at the end of Year 2 was closest to which of the following?

A positive fully diluted earnings per share can sometimes exceed basic (undiluted)earnings per share.