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Hickory Building Materials' current statement contains the following information (in millions): Sales$ 75.0 Less: Variable costs 40.0 Revenue before fixed costs35.0 Less: Fixed Costs 15.0
Hickory Building Materials' current statement contains the following information (in millions):
Sales$ 75.0
Less: Variable costs40.0
Revenue before fixed costs35.0
Less: Fixed Costs15.0
EBIT20.0
Less: Interest4.0
EBT16.0
Less: Taxes @ 40 percent6.4
Earnings After Tax $ 9.6
There are 3 million shares of common stock outstanding.
a)Calculate the Degree of Operating Leverage.
b)Calculate the Degree of Financial Leverage.
c)Calculate the Degree of Total Leverage.
d)A 5 percent increase in sales (at this base level) will result in what EPS ?
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