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    Chapter 7 Leverage (Exercise)

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    Kien Wah
    PRGT's analytical profit and loss statement for 2013 shows sales of RM 64 million with variable costs of RM 38.4 million, resulting in contributions of RM 25.6 million. Fixed costs were RM 8 million and EBIT was RM 17.6 million after subtracting fixed costs. Interest expenses were RM 3.2 million and net income after tax was RM 10.36 million. The document provides financial information about PRGT to calculate break-even point, degree of operating leverage, degree of financial leverage, degree of combined leverage, and the expected percentage changes in operating income and earnings per share under different sales and EBIT increase scenarios.

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    Chapter 7 Leverage (Exercise)

    Uploaded by

    Kien Wah
    47 views1 page
    PRGT's analytical profit and loss statement for 2013 shows sales of RM 64 million with variable costs of RM 38.4 million, resulting in contributions of RM 25.6 million. Fixed costs were RM 8 million and EBIT was RM 17.6 million after subtracting fixed costs. Interest expenses were RM 3.2 million and net income after tax was RM 10.36 million. The document provides financial information about PRGT to calculate break-even point, degree of operating leverage, degree of financial leverage, degree of combined leverage, and the expected percentage changes in operating income and earnings per share under different sales and EBIT increase scenarios.

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    Business Finance Chapter 7 Leverage https://www.facebook.com/polyasp

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    PRGT's analytical profit and loss statement for 2013 shows sales of RM 64 million with variable costs of RM 38.4 million, resulting in contributions of RM 25.6 million. Fixed costs were RM 8 million and EBIT was RM 17.6 million after subtracting fixed costs. Interest expenses were RM 3.2 million and net income after tax was RM 10.36 million. The document provides financial information about PRGT to calculate break-even point, degree of operating leverage, degree of financial leverage, degree of combined leverage, and the expected percentage changes in operating income and earnings per share under different sales and EBIT increase scenarios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    47 views1 page

    Chapter 7 Leverage (Exercise)

    Uploaded by

    Kien Wah
    PRGT's analytical profit and loss statement for 2013 shows sales of RM 64 million with variable costs of RM 38.4 million, resulting in contributions of RM 25.6 million. Fixed costs were RM 8 million and EBIT was RM 17.6 million after subtracting fixed costs. Interest expenses were RM 3.2 million and net income after tax was RM 10.36 million. The document provides financial information about PRGT to calculate break-even point, degree of operating leverage, degree of financial leverage, degree of combined leverage, and the expected percentage changes in operating income and earnings per share under different sales and EBIT increase scenarios.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    Chapter 7 Leverage (Exercise)

    PRGT had developed the following analytical profit and loss statement for PRGT. It represents
    the operations for the year ended 2013.
    Sales RM 64 M
    Variable costs RM 38.4 M
    Contributions RM 25.6 M
    Fixed costs RM 8 M
    EBIT RM 17.6 M
    Interest expenses RM 3.2 M
    EBT RM 14.4 M
    Tax @ 28% RM 4.04 M
    Net Income RM 10.36 M

    Required:
    a. Calculate the breakeven point in Ringgit.
    b. Calculate the DOL
    c. Calculate DFL
    d. Calculate DCL
    e. If the sales should increase by 20%, by what percentage would you expect operating
    income to increase?
    f. Calculate the percentage change in earnings per share if EBIT increase by 30%.

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