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    Operating leverage and combined leverage

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    Degree of operating leverage?
    Degree of Combined leverage:

    Sales: 440,000
    TVC: 240,000
    Fixed Costs: 96,000
    EBIT: 104,000
    Interest 19200
    EBT 84800
    Tax at 35% 29680
    net Income 55120
    Shares outstanding: 16000
    EPS 3.44

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    Solution Preview

    Operating Leverage = (Sales - TVC)/(Sales - TVC - Fixed cost) = ...

    Solution Summary

    This solution explains how to calculate operating leverage and combined leverage for the given problem.