9. Calculating the degrees of leverage

Smith and T Co. forecasts the following income statement for the next year:

Income Statement For the Year Ended on December 31

Net sales	$960,000
Less: Variable costs	532,000
Less: Fixed costs	183,000
EBIT, or NOI	$245,000
Less: Interest	121,000
EBT	$124,000
Less: Taxes	49,600
Net income	$74,400

Smith and T Co. uses no preferred stock in its capital structure. Calculate the degrees of operating, financial, and total leverage for Smith and T Co. and select your answers in the following table.

DOL
DFL
DTL

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