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dont use hand-writing 6. Consider the following income statement. GOODING RETAIL, LTD. Year ended Dec 31, 2019 SALES Less: Variable Costs Contribution Less: Fixed Costs

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6. Consider the following income statement. GOODING RETAIL, LTD. Year ended Dec 31, 2019 SALES Less: Variable Costs Contribution Less: Fixed Costs Earnings before interest and taxes (EBIT) Less: Interest expense Earnings before taxes (EBT) Taxes @40% Earnings after taxes Number of common shares Earnings per share (EPS) $3,560,000 1,420,000 2,140,000 1,200,000 940,000 300,000 640,000 256,000 384,000 190,000 a) Given the above statement for Gooding Retail, calculate the earnings per share (EPS) (1 point) b) Given the above statement, calculate the degree of operating leverage (2 points) c) Given the above statement, calculate the degree of financial leverage. (2 points) d) Given the above statement, calculate the degree of combined or total leverage. (1.5 points) e) Write a statement interpreting in words and using the appropriate percentages what the degree of operating leverage (DOL) arrived at in b) means. (2 points) f) Find the percentage decrease in earnings per share if there is a 6% decrease in sales revenue. (1.5 points)

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