User Account

All Pages

Calculate the degree of operating leverage

Assignment Help Finance Basics
Reference no: EM132485181

Hickory Building Materials' current statement contains the following information (in millions):

Sales $ 75.0

Less: Variable costs 40.0

Revenue before fixed costs 35.0

Less: Fixed Costs 15.0

EBIT 20.0

Less: Interest 4.0

EBT 16.0

Less: Taxes @ 40 percent 6.4

Earnings After Tax $ 9.6

There are 3 million shares of common stock outstanding.

a) Calculate the Degree of Operating Leverage.

b) Calculate the Degree of Financial Leverage.

c) Calculate the Degree of Total Leverage.

d) A 5 percent increase in sales (at this base level) will result in what EPS ?

Reference no: EM132485181

Questions Cloud

Compute pv of perpetuity : 1. Find PV of Perpetuity where PMT = $7000, Rates = 5%. 2. Find FV of $700 ordinary Annuity payment over 7 years @ 5% interest.
Discuss elements such as texture and line : Use descriptive and precise language to capture all aspects of the artwork as you experienced it. Discuss elements such as texture, shape, color, and line.
What is the estimate for the expected stock price : What is the estimate for the expected stock price for the stock in one year's time?
Write entry for cost of goods sold using individual item : Prepare and Show the value of the ending inventory using the lower-of-cost-or-market rule applied to (1) each individual inventory item
Calculate the degree of operating leverage : Hickory Building Materials' current statement contains the following information (in millions):
How the european union law has impacted it policy : The General Data Protection Regulation (EU) 2016/679 (GDPR) is a regulation in EU law on data protection and privacy for all individual citizens.
How retained earnings should increase or decrease by : Determine How retained earnings should increase or decrease by? During the period, a 10% stock dividend was declared and distributed.
Continuing residual income and the persistence factor : What are the three common assumptions made by analysts concerning the continuing residual income and the persistence factor?
Make all journal entries necessary on those three dates : Pearl securities are to be distributed on October 23, 2018, to stockholders of record on October 8 2018. Make all journal entries necessary on those three dates

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd