Levered Company

Levered Company - LeveredCompany:IncomeStatement...

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Levered Company: Income Statement Sales   (100,000 x $14) 1,400,000 -Variable Costs  (100,000 x $8)   (800,000) -Fixed Costs      (given)                                 (250,000)     EBIT    350,000   -Interest      (given)                                            (125,000)     EBT    225,000 -Taxes (34%)                                    (76,500)     Net Income    $148,500   EPS  (148,500/100,000)      $1.485 DOL = (Sales – VC)/EBIT  =(1,400-800)/350 =  1.714 DFL = EBIT/ (EBIT –I) =350/(350 – 125) =  1.556 DCL = DOL x DFL =1.71 x 1.56 =  2.667   * Leverage Relationship * Levered Company * Levered Company * Levered Company * Levered Company
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* Levered Company: 10% Increase in  Sales Sales   (110,000 x $14)
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