Step #1:

Maverick Technologies has sales of $3,000,000. The companys fixed operating costs total $462,602 and its variable costs equal 60% of sales. The companys interest expense is $500,000. What is the companys degree of total leverage (DTL)?

Step #2:

Maverick Technologies has sales of $3,000,000. The companys fixed operating costs total $500,000 and its variable costs equal 60% of sales, so the companys current operating income is $700,000. The companys interest expense is $421,623. What is the companys degree of financial leverage (DFL)?