Luther Corporation Consolidated Income Statement Year ended December 31 (in $ millions)
	2009	2008
Total sales	610.1	578.3
Cost of sales	(500.2)	(481.9)
Gross profit	109.9	96.4
Selling, general, and administrative expenses	(40.5)	(39.0)
Research and development	(24.6)	(22.8)
Depreciation and amortization	(3.6)	(3.3)
Operating income	41.2	31.3
Other income	---	---
Earnings before interest and taxes (EBIT)	41.2	31.3
Interest income (expense)	(25.1)	(15.8)
Pre-tax income	16.1	15.5
Taxes	(5.5)	(5.3)
Net income	10.6	10.2
Price per share	$16	$15
Shares outstanding (millions)	10.2	8.0
Stock options outstanding (millions)	0.3	0.2
Stockholders' Equity	126.6	63.6
Total Liabilities and Stockholders' Equity	533.1	386.7

Luther Corporation

Consolidated Balance Sheet

December 31, 2009 and 2008 (in $ millions)

Assets	2009	2008		Liabilities and Stockholders' Equity	2009	2008
Current Assets				Current Liabilities
Cash	63.6	58.5		Accounts payable	87.6	73.5
Accounts receivable	55.5	39.6		Notes payable / short-term debt	10.5	9.6
Inventories	45.9	42.9		Current maturities of long-term debt	39.9	36.9
Other current assets	6.0	3.0		Other current liabilities	6.0	12.0
Total current assets	171.0	144.0		Total current liabilities	144.0	132.0
Long-Term Assets				Long-Term Liabilities
Land	66.6	62.1		Long-term debt	239.7	168.9
Buildings	109.5	91.5		Capital lease obligations	---	---
Equipment	119.1	99.6		Total Debt	239.7	168.9
Less accumulated depreciation	(56.1)	(52.5)		Deferred taxes	22.8	22.2
Net property, plant, and equipment	239.1	200.7		Other long-term liabilities	---	---
Goodwill	60.0	--		Total long-term liabilities	262.5	191.1
Other long-term assets	63.0	42.0		Total liabilities	406.5	323.1
Total long-term assets	362.1	242.7		Stockholders' Equity	126.6	63.6
Total Assets	533.1	386.7		Total liabilities and Stockholders' Equity	533.1	386.7

Consider the Luther Corporation income statement, balance sheet and other information :

Luther's return on equity (ROE) for the year ending December 31, 2009 is closest to:

a. 2.0%

b. 6.5%

c. 8.4%

d. 12.7%

Assuming that Luther has no convertible bonds outstanding, then for the year ending December 31, 2009 Luther's diluted earnings per share are closest to:

a. $1.01

b. $1.04

c. $1.28

d. $1.33

Luther's Operating Margin for the year ending Dec 31, 2008 is closest to:

a. 0.5%

b. 0.7%

c. 5.4%

d.6.8%

When using the book value of equity, the debt to equity ratio for Luther in 2009 is closest to:

a. 0.43

b. 2.29

c. 2.98

d.3.57