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90 MARION & CARTER, INC. Income Statement for Years Ending December 31, 2018 and 2017 (in millions of dollars) 2018 2017 Net sales $ 1,705 Less: Cost of goods sold 830 Gross profits $1,123 $ 958 Less: Other operating expenses 100 Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 1,023 $ 868 Less: Depreciation 80 75 Earnings before interest and taxes (EBIT) $ 943 $ 793 Less: Interest 112 Earnings before taxes (EBT) $ 844 $ 681 Less: Taxes 248 Net income $ 559 $ 433 Less: Preferred stock dividends $ 62 $ 62 Net income available to common stockholders $ 497 $ 371 Less: Common stock dividends 155 Addition to retained earnings $ 342 $ 216 Per (common) share data: Earnings per share (EPS) $ 1.855 Dividends per share (DPS) $ 0.775 Book value per share (BVPS) $6.035 Market value (price) per share (MVPS) $22.970 $21.470 -35 $ MARION & CARTER, INC. Statement of Cash Flows for Year Ending December 31, 2018 (in millions of dollars) Section A. Cash flows from operating activities Net income Additions: Depreciation 80 Increase in accrued wages and taxes Increase in accounts payable 30 Subtractions: Increase in accounts receivable Increase in Inventory Net cash flow from operating activities: Section B. Cash flows from investing activities Subtractions: Increase in fixed assets -$ 420 Increase in other long-term assets Net cash flow from investing activities: Section C. Cash flows from financing activities Additions: Increase in notes payable Increase in long-term debt 32 Increase in common and preferred stock 0 Subtractions: Pay preferred stock dividends Pay common stock dividends Net cash flow from financing activities: Section D. Net change in cash and marketable securities $ 10 $ MARION & CARTER, INC. Statement of Retained Earnings as of December 31, 2018 (in millions of dollars) Balance of retained earnings, December 31, 2017 $ 957 Plus: Net income for 2018 $ Less: Cash dividends paid Preferred stock Common stock Total cash dividends paid Balance of retained earnings, December 31, 2018 $1,299 $