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Use this table to answer the next 3 questions. IWI Financials 2022 - 2023 2022 2023 Earnings Per Share (EPS) $2.20 $3.00 Revenue $71.6 million
Use this table to answer the next 3 questions. IWI Financials 2022 - 2023 2022 2023 Earnings Per Share (EPS) $2.20 $3.00 Revenue $71.6 million $82.5 million Cash $2.7 million $2.9 million Sales $71 million $82 million Inventory $1.8 million $2 million EBIT $44 million $47.3 million Net Income $42.7 million $53 million18. What is IWI's Degree of Financial Leverage (DFL?) What does this number suggest about IWI's debt levels? 19. What is IWI's degree of Operating Leverage (DOL)? What does this tell you about IWI's use of fixed assets in its operations? 20. GW Inc has a Degree of Combined Leverage (DCL) of 1.1. Compare this to FINA Inc's DCL of 1.9 and predict which company would have the most risk in the face of a recession? Why?21. You hold a FINA Inc convertible bond with a face value of $10,000 and a coupon rate of 3% annually. The market rate for bonds of similar risk levels is currently 4.5%. The bond will mature in 5 years. The conversion ratio of this bond allows you to convert it to 90 shares of FINA Inc common stock. FINA Shares are currently trading at a market value of $72.55 per share. You need money to pay off a bad bet and must cash in the bond. Will you sell it on the bond market or convert it? Give the value for both options
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