Calculate the degree of operating leverage

Assignment Help Financial Accounting
Reference no: EM132763491

Questions -

Q1 - Abreviated Income Statement $thousands, except EPS 31-Dec-20 31-Dec-19 Total Revenue 1,743,641 781,963 Cost of Goods Sold 431,725 278,433 Gross Profit 1,311,916 503,530 Operating Expenses 68,470 52,402 Operating Income 1,243,446 451,128 Interest & Taxes 453,190 293,537 Net Income 790,256 157,591 EPS, 50,000,000 shares outstanding 15.81 3.15 (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).

Q2 - 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: EM132763491

Questions Cloud

Calculate the outstanding balance after ten years : Calculate the outstanding balance after 10 years using the retrospective method. For the last 3 questions, you will need your answer from (a)
How in a union work environment : How in a union work environment, the role is played by the union through the formal grievance process.
Write a real action plan to improve my weaknesses : -Consider a wide range of options but neglect to research the evidence in depth
Employee job satisfaction and engagement : Fairness and transparency are fundamental yet powerful concepts that can make a lasting impression on employees. According to SHRM's Employee
Calculate the degree of operating leverage : Abreviated Income Statement $thousands, except EPS 31-Dec-20 31-Dec-19 Total Revenue 1,743,641 781,963. Calculate the degree of operating leverage
Explain the main conclusions of the capm : Describe the equation of the Security Market Line (SML hereafter). Why, under the CAPM, must fairly priced assets plot exactly on the SML? Discuss.
How the organization scm has helped : Choose 2 companies from the article and research how the organization's SCM has helped their businesses succeed
How much will Reed need to have accumulated on the day : Assuming he is expected to live until age 90 and he has a wage replacement ratio of 80%, how much will Reed need to have accumulated on the day
Existing structure and reporting relationships : A company has retained you to study their existing structure and reporting relationships.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

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