E13-2. The Wall Street Journal routinely publishes summaries of corporate quarterly and annual earnings reports in a feature called the "Earnings Digest." A typical "digest" report takes the following form.

Energy Enterprises (A)

Quarter ending July 31 {2014} [2013]

Sales revenue {$2,049,000,000} [$1,754,000,000] Net income {97,000,000} [(a)68,750,000] EPS: Net income {1.28} [.93]

12 months ending July 31 {2014} [2013] Sales revenue {$5,578,500,000} [$5,065,300,000] Extraordinary item {(b) 1,900,000} Net income {102,700,000} [(a) 33,250,000] EPS: Net income {1.36} [.48]

(a) Includes a net charge of $26,000,000 from loss on the sale of electrical equipment. (b) Extraordinary gains on Middle East property exportations.

The letter in parentheses following the company name indicates the exchange on which Energy Enterprise' stock is traded--in this case, the American Stock Exchange.

Answer the following: (d) Did Energy Enterprises have an operating loss in any quarter of 2013? Of 2014? How do you know?

(e) Approximately how many shares of stock were outstanding in 2014? Did the number of outstanding shares change from July 31, 2013 to July 31, 2014?

(f) As an investor, what numbers should you use to determine Energy Enterprises' profit margin? Calculate the profit margin for 2013 and 2014 that you consider most useful. Explain your decision.