For two firms in the same industry, report the Degree of Operating Leverage and the Degree of Financial Leverage. (Be sure these formulas are the same as in the textbook. One or both may need to be calculated.) Comment on which company is more highly leveraged.

1) The percentage change in EBIT from time period one to time period two

2) The percentage change in sales from time period one to time period two

The formula is then, DOL = % change in EBIT / % change in sales EBIT can be calculated by taking the sales revenue and subtracting the operating expenses.

And use this for DFL DFL = %change in EPS / %change in EBIT

DATA

Annual Income Statement Data

	Actuals in B KRW			Estimates in B KRW
Fiscal Period December	2016	2017	2018	2019 (e)	2020 (e)	2021 (e)
Sales	201 900	239 575	243 771	230 300	245 934	266 299
EBITDA	49 910	75 762	85 369	54 728	63 434	74 327
Operating profit (EBIT)	29 200	53 645	58 887	26 892	34 810	45 725
Pre-Tax Profit (EBT)	30 714	56 196	61 160	29 710	37 877	50 060
Net income	22 416	41 345	43 891	21 205	26 923	35 773
P/E ratio	-	-	-	15,3x	12,0x	9,01x
EPS ( KRW )	3 159	5 997	6 461	3 211	4 112	5 460
Dividend per Share ( KRW )	570	850	1 413	1 439	1 584	1 728
Yield	-	-	-	2,93%	3,22%	3,51%
Reference price ( KRW )	-	-	-	49 200,000	49 200,000	49 200,000
Announcement Date	01/23/2017 11:55pm	01/30/2018 11:45pm	01/30/2019 11:30pm	-	-

Annual Income Statement Data

	Actuals in B KRW			Estimates in B KRW
Fiscal Period December	2016	2017	2018	2019 (e)	2020 (e)	2021 (e)
Sales	55 370	61 396	61 340	62 887	66 472	69 135
EBITDA	3 075	4 236	4 703	4 931	5 389	5 769
Operating profit (EBIT)	1 340	2 469	2 703	2 526	2 966	3 289
Pre-Tax Profit (EBT)	722	2 558	2 009	1 522	2 300	2 706
Net income	76,9	1 726	1 240	1 060	1 553	1 838
P/E ratio	-	-	-	10,8x	7,34x	6,30x
EPS ( KRW )	422	9 579	6 882	6 085	8 973	10 461
Dividend per Share ( KRW )	400	400	750	809	829	875
Yield	-	-	-	1,23%	1,26%	1,33%
Reference price ( KRW )	-	-	-	65 900,000	65 900,000	65 900,000
Announcement Date	01/25/2017 05:50am	01/08/2018 12:00am	01/08/2019 06:08am	-	-

Samsung

2018 2017

EBIT (market screener) 5887 EBIT 53645

Units Samsung 243771 Units 239575

EPS (KRW) .6.461 5.997

DOL=%change in EBIT/% change in units=

DFL = %change in EPS/% change in EBIT =

LG Electronics

2018 2017

EBIT (Market screener) 2703 4236

Units (Lg Electronics) 61340 61396

EPS(ZACKS.com) 6.882 9.579

DOL=

DFL =

https://www.marketscreener.com/LG-ELECTRONICS-INC-6491575/financials/