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Calculate the degree of operating leverage

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Reference no: EM132699403

Abreviated Income Statement $thousands, except EPS 31-Dec-2031-Dec-19 Total Revenue 1,710,700 720,425 Cost of Goods Sold 420,284 233,369 Gross Profit 1,290,416 487,056 Operating Expenses 67,340 54,288 Operating Income 1,223,076 432,768 Interest & Taxes 459,583 296,560 Net Income 763,493 136,208 EPS, 50,000,000 shares outstanding 15.27 2.72 (Round all answers to two decimals, i.e. 12.00)

a) Calculate the degree of operating leverage (DOL).

b) Calculate the degree of financial leverage (DFL).

c) Calculate the degree of combined leverage (DCL).

What do the degree of operating leverage (DOL, degree of financial leverage (DFL), and degree of combined leverage (DCL) You obtained in the previous question mean? Explain fully using your results.

Reference no: EM132699403

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