Question

Mercedes, Co. has the following quarterly financial information. 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Sales Revenue $ 925,800 $ 935,300 $ 933,600 $ 941,400 Cost of Goods Sold 305,700 318,300 317,900 323,100 Operating Expenses 248,900 260,300 258,500 262,600 Interest Expense 4,200 4,200 4,200 4,100 Income Tax Expense 85,500 88,400 88,400 90,900 Average Number of Common Shares Outstanding 799,030 794,064 795,670 809,000 Stock price when Q4 EPS released $ 24 Required: Calculate the gross profit percentage for each quarter. Calculate the net profit margin for each quarter. Calculate the EPS for each quarter. Calculate the Price/Earnings ratio at the end of the year.

• Required A
• Required B
• Required C
• Required D

Calculate the gross profit percentage for each quarter. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

	Q4 Q3 Q2 Q1 Gross Profit Percentage % % % %

• Required A
• Required B
• Required C
• Required D

Calculate the net profit margin for each quarter. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

	Q4 Q3 Q2 Q1 Net Profit Margin % % % %

• Required A
• Required B
• Required C
• Required D

Calculate the EPS for each quarter. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

	Q4 Q3 Q2 Q1 EPS

• Required A
• Required B
• Required C
• Required D

Calculate the Price/Earnings ratio at the end of the year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

	P/E Ratio

Answer 1

Part a to C
Details	4th quarter	3rd quarter	2nd quarter	1st quarters
Sales revenue (a)	$925,800	$935,300	$933,600	$941,400
Less: Cost of goods sold	$305,700	$318,300	$317,900	$323,100
Gross profit margin (b)	$620,100	$617,000	$615,700	$618,300
Less: Operating expenses	$248,900	$260,300	$258,500	$262,600
Interest expenses	$4,200	$4,200	$4,200	$4,100
Income tax expenses	$85,500	$88,400	$88,400	$90,900
Net income (c )	$281,500	$264,100	$264,600	$260,700
No. of share (d)	799030	794064	795670	809000
Gross Profit Ratio (b/a) ( GP Margin/ Sales Revenue )	66.98%	65.97%	65.95%	65.68%
Net Profit Margin (c )	$281,500.00	$264,100.00	$264,600.00	$260,700.00
EPS ( c/d)	$0.35	$0.33	$0.33	$0.32

Part-d

PE Ratio= Market Price / Earning Per share

=$24/ (0.37+0.35+0.35+0.34)= 17.91