Dupaudio Inc

question 47

Multiple Choice

Dupaudio Inc. had EBITDA of $3,000 and EBIT of $2,750, with fixed cash expense of $600 last year. What was Dupaudio's degree of accounting operating leverage?

• A) 1.20
• B) 1.25
• C) 1.28
• D) 1.31

Understand the implications of financial leverage on company solvency and profitability.

Learn the calculations and implications of the debt to total assets ratio and times interest earned ratio.

Interpret the effects of managing inventory and receivables on a company's cash flow.

Understand how different ratios interact to affect the return on assets ratio.

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Definitions:

Common-sized Balance Sheet

A financial statement in which each line item is expressed as a percentage of total assets, facilitating comparison across firms and time periods.

Percentage Analyses

A financial analysis technique that expresses components of financial statements as percentages of a base amount to compare financial data across periods or companies.

Ratios

Quantitative metrics calculated from financial statements to evaluate various aspects of a company's performance or financial health.

Turnovers

The rate at which inventory or assets are sold and replaced or employees leave a company and are replaced over a given period.