I need some help with this case study. I have to decide wether or not I should invest in this gold mine. After look at these financial statements I have decided to invest in this gold mine because of some of the following
-Sales revenue increased by a margin of $9,876 from 2012 to 2013 and then by $18,318 from 2013 to 2014
– Income per share increase from $2.83 in 2012 to $4.40 in 2014
– Total liabilities decreased from $96,149 to $65,132
– Net income also increases $28,300 to $43,977 in 2014.
But i am having difficulty in pointing out more reasons as to why I should invest. Also I am not sure how to calculate Earning- per share ratio and net income to sales ratio.
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Bling Gold Mines, Inc.CONSOLIDATED STATEMENTS OF INCOME(US dollars in thousands, except per share amounts)Years ended December 31,201420132012Re152,573134,255124,379Operating expenses:Production costs17,51216,21515,014Depreciation and depletion38,62437,86737, 125Total cost of sales56,13654,08252, 139Exploration, development, and land holding4,3634,1954,034Corporate general and administrative17,64717,47217,299Income from operations74,42758,50650,907Other income (expense):Interest income75664857StS’tZOT’9Interest expense5,737Foreign exchange gain, net54967161Other income, net29217826Income before income taxes70, 93053,59545,645Income tax (expense) benefit(26,953)(20,366)(17,345)Net income43,97733,22928,300Dividends paid39,00029,00025, 000Addition to retained earnings4,9774,2293,300Income per share:Basic4.403.322.83Diluted188.8.131.52