HARDING COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (12,000 skates @ $90 each) $ 1,080,000 Variable costs (12,000 skates at $40) 480,000 Fixed costs 350,000 Earnings before interest and taxes (EBIT) $ 250,000 Interest expense 70,000 Earnings before taxes (EBT) $ 180,000 Income tax expense (30%) 54,000 Earnings after taxes (EAT) $ 126,000

Compute the degree of operating leverage. (Round your answer to 2 decimal places.)

b. Compute the degree of financial leverage. (Round your answer to 2 decimal places.)