Sheffield Corp.'s degree of operating leverage is 1.9. Warren Corporation's degree of operating leverage is 6. Warren's earnings would go up (or down) by as much as Sheffield's with an equal increase (or decrease) in sales. O 4.1 times O 3.2 times O 0.9 O 7.9 times
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- 1. Bonita Industries’s degree of operating leverage is 2.0. Warren Corporation’s degree of operating leverage is 5.8. Warren’s earnings would go up (or down) by ________ as much as Bonita’s with an equal increase (or decrease) in sales. 2.9 times 7.8 times 3.8 times 1.0Assume Hayworth corp. has an operating leverage of 4.92 and a financial leverage of 1.24. How much would the EBIT of Hayworth corp. decrease if sales decreased by 0.06? Instruction: Round to three decimal places.A firm has a tax burden of 0.7. a leverage ratio of 1.3, an interest burden of .8, and a return-on-sales ratio of 10%. The firm generates $2.78 in sales per dollar of assets. What is the firm's ROE? A. 16.6% B. 12.4% C. 14.5% D. 20.2%
- #18 Scottie Company’s degree of operating leverage is 1.5. Erstadt Corporation’s degree of operating leverage is 4.5. Erstadt’s earnings would go up (or down) by ________ as much as Scottie’s with an equal increase (or decrease) in sales.A firm has a tax burden ratio of 0.85, a leverage ratio of 1.5, an interest burden of 0.9, and a return on sales of 12%. The firm generates $2 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) ROE %Assume Hayworth corp. has an operating leverage of 5.39 and a financial leverage of 1.53. How much would the EPS of Hayworth corp. increase if sales increased by 0.23? Instruction: Round to three decimal places
- Given the following information, which of the following statements is most FALSE? Historical Yr Projected Yr Sales 185,000 220,000 EBIT 116,000 140,000 NI 60,000 75,190 O a. The degree of total leverage is 1.4153. Ob. The degree of operating leverage is 1.0936. O c. The degree of financial leverage is 1.2236. d. EPS would increase by the same percentage as NI. Oe. The financial leverage was caused by the interest expense not staying proportional to Sales.Dan Corp. has a degree of financial leverage of 2. Third Corp. will experience a 75% increase in earnings per share, and it will have earnings before interest and taxes of P120,000 if sales increase by 30%. Determine the degree of operating leverage of the Dan Corp.? A. 1.25 B. 1.00 C. 1.20 D. 1.40Compare the following two companies. California Corp • Net income margin = 10% • Asset turnover = 3.00 • Financial leverage = 2.00 Indiana Corp • Net income margin = 40% • Asset turnover = 1.00 !3! • Financial leverage = 0.50 Which of the following statements are true? California Corp has relied on equitý to finance its assets more than Indiana Corp has California Corp has a lower return on equity than Indiana Corp OCalifornia Corp has a higher return on equity than Indiana Corp California Corp generates more sales for every dollar of assets than does Indiana Corp
- * A company provided the following information: ROA= 15% Financial Leverage Ratio 1.8 What is the company's financial leverage percentage? (Round your answeGive typing answer with explanation and conclusion _____ 2.) A company has a tax burden ratio of 0.4, a compound leverage factor of 0.6, a return on sales of 0.9, a leverage ratio of 0.7, and an asset turnover of 0.3. What is the ROE for the company? A.) 2.90% B.) 4.54% C.) 6.48% D.) 11.4% E.) None of the aboveIf financial leverage of a firm is 4, Interest 6,00,000, Operating Leverage is 3, Variable cost to sales is 66.66%, Income tax rate is 30%, Number of Equity Shares 1, 00, 000. Calculate fixed cost and EPS of the firms. (For your reference, OL = Contribution/EBIT; FL = EBIT/EBT and CL = OL*FL)
