The following is a list of selected information for Liverpool Co. for the fiscal year.

	Forecasted Operations	Sales with 30.00% Increase	Unit Change
Sales in units (millions)	200	260	60
Earnings before interest and taxes (EBIT)	4,000.00	5,600.00	1,600.00
Less: Interest	(150.00)	(150.00)	(0.00)
Earnings before taxes	$3,850.00	$5,450.00	$1,600.00
Less: Taxes (40%)	1,540.00	2,180.00	(0.00)
Net income	2,310.00	3,270.00	960.00
Earnings per share (20 million shares)	$115.50	$163.50	$48.00

You are an employee for Liverpool Co., and your boss needs help assessing the level of risk associated with the firms current financial position. Begin by calculating the degree of financial leverage for the change between forecasted operations and the operational increase of 30.00%.

0.60X

1.04X

0.42X

1.03X

Your boss says, Looking good so far. However, I would like to know how we stack up against our strongest competitor, Everton Co. Compare the degree of operating leverage of Everton Co. with that of Liverpool Co. and then answer the following question.

All else being equal, is Liverpool Co. more risky than, less risky than, or as equally risky as Everton Co., considering that the degree of financial leverage for Everton Co. is 1?

Not enough information given

More risky

Less risky