sales(10,000 skates@50$ each) $500.00
less(varible costs(10,000 skates at $20.00)
fixed cost..................................$150,000
earnings before intrest and taxes $150,000
interest expense...........................$ 60,000
earnings before taxes $90,000
income tax expense(40%) $36,000
earnings after taxes $54,000


given this income statement compute the following

Degree of operating leverage

Degree of financial leverage

Degree of combined leverege

Break even point in units ( number of skates)


Can anyone help me? I don't understand this.

please!!!!!

You'd probably get more help if you had a more sensible thread title.

I figured that if I used a sensible title nobody would even look at what I was asking. I guess I was just trying to get anybodys attention.

Ok...stupid thread title. Can somebody please help me anyway? I suck at this stuff.

Anyone know what:

Degree of operating leverage

Degree of financial leverage

Degree of combined leverege


means?

If 10,000 * $50 = $500, then I'm a chinaman. If that's 5 cents, then where's this 150k profit come from?

Am I ridiculously ignorant?

Degree of operating leverage
Degree of financial leverage
Degree of combined leverege

http://210.210.18.114/EnlightenmentorAreas/finance/CFA/leverage.htm


Break even point in units ( number of skates)

http://www.bizbound.com/breakeven.htm