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Question: 1524 leverage analysis an analytical income statement for last years...

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15-24 (Leverage analysis) An analytical income statement for last years operations follows. $18000000 7000000 $11000000 6000000 $5000000 1 750000 $3250000 1250000 $2000000 Sales - Variable costs Revenue before fixed costs Fixed costs EBIT -Interest expense Earnings before taxes - Taxes Net income (a) At this level of output, what is the degree of operating leverage? b) What is the degree of financial leverage? (c) What is the degree of combined leverage? (d) If sales increase by i 5%, by what percent would earnings before taxes (and net income) increase? (e) What is the firms break-even point in sales dollars?
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