Operating leverage =2:1 Financial leverage=1.25:1
Fixed cost excluding intt= 3.4 lakh, sales-50 lakh,. interest -242000 ,Equity share capital-34 lakh ,Tax 30%
Calculate PV ratio and Eps
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sales 5000000
v/c 3450000
con 1550000
f/c 340000
ebit 1210000
int 242000
ebt 968000
t 290400
pat 677600
1.25=ebit/(ebit-i)
1.25(ebit-242000)=ebit
ebit= 1210000
am I right? its long back I used to solve this...☺☺
Not right , different from suggested answers of Nov 2017 issued by ICAI.
My calculations is also same with you. In suggested answers operating leverage taken as a base to find out contribution first .But in our calculations financial leverage taken. But Answer should be the same. I think there is some mistake in that question.
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