Gentech, Inc A)139
B)1

question 30

Multiple Choice

Gentech, Inc. is an integrated circuit (microchip) manufacturer based out of New Jersey. Its principal products include microprocessors and motherboard chipsets. Selected financial statement values for Gentech are shown in the table, below. What is the degree of total leverage for Gentech given the change in revenues from Year 1 to Year 2? $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Gentech Inc. } \\( \$ 000 \text { s } ) \end{array} & & \\\hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Sales } & \$ 70,000 & \$ 75,000 \\\hline \text { EBIT } & 9,000 & 9,800 \\\hline \text { EPS } & 0.4172 & 0.4586 \\\hline\end{array}$$

• A)1.39
• B)1.24
• C)1.11
• D)0.54
• E)0.96

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Definitions:

Downsizing

The planned reduction of a company's workforce to improve efficiency or reduce costs.

Strategic Human Resource Planning

The process of aligning an organization's human resource capacity with its strategic objectives to ensure it can meet future challenges and opportunities.

Workforce Downsizing

The reduction of an organization's employees to improve its efficiency and reduce costs, often resulting in layoffs.

Organizational Strategy

The comprehensive plan of action designed by an organization to achieve its overarching goals and create value.