Learning Goal: I'm working on a finance multi-part question and need an explanation and answer to help me learn.The image Exhibit 4 will help answer the assignment question Attach is the worksheet to completeWk 1- Apply: Summative Assessment: Financial StatementsRefer to Exhibit 4 in Chapter 3 of your text to complete the following:Referring to Exhibit 4, compute the annual percentage change in net income per common share-diluted (second numerical line from the bottom) for 1998-1999, 1999-2000, and 2000-2001.
Also in Exhibit 4, compute net income/net revenue (sales) for each of the four years. Begin with 1998.
What is the major reason for the change in the answer for Question 2 between 2000 and 2001?To answer this question for each of the two years, take the ratio of the major income statement accounts to net revenues (sales).
Compute return on stockholders’ equity for 2000 and 2001 using data from Exhibits 4 and 5.
Analyze your results in Question 4 more completely by computing Ratios 1, 2a, 2b, and 3b for 2000 and 2001.Determine the main contributing factor to the change in return on stockholders’ equity between 2000 and 2001.Think in terms of DuPont system of analysis.
The average stock prices for each of the four years shown in in Exhibit 4 were as follows:
The book values per share for the same four years discussed in the preceding question were:
Date Range Annual Percentage Change 1998-1999 1999-2000 2000-2001 Year Net Income/Net Revenue 1998 1999 2000 2001 Reason for Change Cost of sales Research and development Selling, general and administrative expense Provision for income tax Year Return on Equity 2000 2001 Year Average Stock Prices Price Earnings (P/E) 1998 11 ¼ 1999 16 ¾ 2000 28 ½ 2001 9 ½ Compute the price-earnings (P/E) ration for each year in the table above. (Take the stock price shown above and divide by net income per common stock-dilution from Exhibit 4)
Assess why the P/E changed from its 2000 level to its 2001 level.
Year Book Values Ratio of price to book value 1998 $1.18 1999 $1.55 2000 $2.29 2001 $3.26 Compute the ratio of price to book value for each year in the table above.
Assess whether there is any dramatic shift in the ratios worthy of note.