Financial management

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

26 August 2016 Followings is the Balance Sheet of a Company as on March 31, 2014
Liabilities and Equity Rs.(lakh) Assets Rs. (lakh)
Equity Share Capital
(one lakh shares of Rs.10 each) 10 Fixed Assets (Net) 25
Reserves and Surplus 2 Current Assets 15
15% Debentures 20
Current Liabilities 8 _____
40 40
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The additional information given is as under:
Fixed Costs per annum (excluding interest) Rs. 8 lakhs
Variable operating costs ratio 65%
Total sales 100 lakhs
Income-tax rate 40%
Calculate the following:
(a) Earnings per share
(b) Operating Leverage
(c) Financial Leverage and
(d) Combined Leverage

Expert : Anonymous

Expert : Anonymous (Expert)

02 September 2016 Dear Student, Kindly find the answer First of all we need to calculate Contribution, EBIT, EBT & PAT Sales - 100 less Variable cost (65) contribution. 35 less Fixed cost. (8) EBIT. 27 less deb int. (3) EBT. 24 less income tax (9.6) 40% EAT. 14.4 Eps = 14.4/1 = 14.4 OL. = 35/27 = 1.29 FL. = 27/24 = 1.125 CL = 1.29x1.125 =1.45 Hope your query is resolved Kindly like if my response has helped you

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