Question
The financial statements of two companies are listed below for the recently concluded year 2020. You are asked to analyse the following- a) As both
The financial statements of two companies are listed below for the recently concluded year 2020. You are asked to analyse the following-
a) As both the firms are operating in the same industry, find the degree of operating and financial risk of both the firms and analyse the results
b) If in the current year (2021) due to Covid-19 the sales are expected to be decline by 30% for both the firms, find and analyse the impact on both the firms EBIT & EPS.
| Company X | Company Y | |
| Rs (Million) | Rs (Million) | |
| Sales | 5000 | 8000 |
| VC | 3000 | 4800 |
| Operating FC | 1000 | 2500 |
| Interest | 500 | 0 |
| Tax rate | 30% | 30% |
| No of shares (No) | 200 | 200 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance Fundamentals For Nonprofits
Authors: Woods Bowman
1st Edition
1118004515, 9781118004517
