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(Leverage Analysis) You have developed the following income statement for the Hugo Boss Corporation. It represents the most recent years operations, which ended yesterday. Sales
(Leverage Analysis) You have developed the following income statement for the Hugo Boss Corporation. It represents the most recent years operations, which ended yesterday. Sales $50,439,375 Variable cost (25,137,000) Revenue before fixed costs $25,302,375 Fixed costs (10,143,000) EBIT $15,159,375 Interest expense (1,488,375) Earnings before taxes $13,671,000 Taxes at 50% (6,835,500) Net income $6,835,500 Your supervisor in the controllers office has just handed you a memorandum asking for written responses to the following questions: A) What is the firms break-even point in sales dollars? B) If sales should increase by 30%, by what percent would earnings before taxes (and net income) increase?
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