1. Compute annual percent change in net income per common share diluted.
Formula: % change= P2-P1/P1
Year 2001-2000 2000-1999 1999-1998
Net income per common share-dilution 0.55-0.27=0.28 0.55-0.31=0.24 0.31-0.24=0.07
Annual % 0.28/0.27=103% 0.24/0.31=77% 0.07/0.24= 29%
2. Compute net income/net revenue.
Year 2001 2000 1999 1998
Net income 927 1,854 1,030 755
Net revenue 18,250 15,721 11,806 9862
Profit Margin 19.6% 11.7% 11.4% 7.6%
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3. What is the major reason for the change in the answer for question 2 between 2000 and 2001?
2001 2000
Cost of Sales 10,041 7,549
Research and Development 2,016 1,630
Selling, General, and Administrative Expenses 4,544 4,072
Provision for Income Taxes 603 917 Net Revenues 18,250 15,721 Ratio Cost of Sales to Net Revenue 55% 48%
Ratio Research and Development to Net Revenue 11% 10%
Ratio Selling, General & Administrative Expenses to Net Revenue 25% 26%
Ratio Provision for Income Taxes to Net Revenue
References: Block, S. & Hirt, G. (2005). Foundations of financial management. New York, NY: McGraw Hill. Bplans.com. (2007). Executive summary. Retrieved April 27, 2008 from the World Wide Web: http://www.bplans.com