From the Following Income Statement for 2005,calculate:
A)Degree of Financial $12 / 31 / 2015$

question 55

Essay

From the following income statement for 2005,calculate:
A)Degree of financial leverage
B)Degree of operating leverage
C)Degree of combined leverage
Income Statement
for the year ended $12 / 31 / 2015$
$\begin{array}{lr}\text { Sales } & \$ 440,000 \\\text { Variable cost } & 240,000\\\text { Contribution margin } & 200,000 \\\text { Fixed costs } & 96,000 \\ \text { EBIT } & 104,000 \\\text { Interest } & 19,200\\\text { EBT } & 84,800 \\\text { Taxes @35\% } & 29,680 \\\text { Net Income } & \$ 55,120\\\text { Shares outstanding } & 16,000 \\\text { EPS } & \$ 5.52\end{array}$

• A)Degree of financial leverage
• B)Degree of operating leverage
• C)Degree of combined leverage
• Income Statement
• for the year ended \( 12 / 31 / 2015 \)
• \(\begin{array}{lr}
• \text { Sales } & \$ 440,000 \\
• \text { Variable cost } & 240,000\\\text { Contribution margin } & 200,000 \\
• \text { Fixed costs } & 96,000 \\
• \text { EBIT } & 104,000 \\
• \text { Interest } & 19,200\\\text { EBT } & 84,800 \\
• \text { Taxes @35\% } & 29,680 \\
• \text { Net Income } & \$ 55,120\\\text { Shares outstanding } & 16,000 \\
• \text { EPS } & \$ 5.52
• \end{array}\)

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