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Dida Berhad had developed the following Income Statement for its operations ended 31 December 2020. Sales (-) Variable Cost Contribution Margin (-) Fixed Costs Earnings
Dida Berhad had developed the following Income Statement for its operations ended 31 December 2020. Sales (-) Variable Cost Contribution Margin (-) Fixed Costs Earnings Before Interest and Taxes Interest Expense Earnings Before Tax Taxes @ 28% Net Income RM 780,000 335,000 445,000 70,000 375,000 16,000 359,000 100,520 258,480 Required: a) Calculate the degree of operating leverage. (2 Marks) b) Calculate the degree of financial leverage. (2 Marks) c) Calculate the degree of combined leverage. (2 Marks) d) If sales should increase by 21%, by what percent would EBIT increase? (2 Marks) e) Given the number of shares is 50,000 shares, calculate the new EPS if EBIT should increase by 35%. (4 Marks)
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