Question
Allied Biscuit Co. forecasts the following income statement for the next year: Income Statement For the Year Ended on December 31 Net sales $960,000 Less:
Allied Biscuit 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 | 167,000 |
EBIT, or NOI | $261,000 |
Less: Interest | 141,000 |
EBT | $120,000 |
Less: Taxes | 48,000 |
Net income | $72,000 |
Allied Biscuit Co. uses no preferred stock in its capital structure. Click on the following lines and calculate the degrees of operating, financial, and total leverage for Allied Biscuit Co.
DOL | 1. A 1.39 B. 1.64 C. 1.44 D. 1.69 E 1.57 |
DFL | 2. A 2.07 B.2.50 C 2.86 D 2.33 E 2.68 F 2.18 G 1.93 |
DTL | 3 A 3.66 B 3.75 C 3.42 D 3.86 E 3.51 F 3.57 G 3.96 |
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
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