Compute two measures of financial leverage for Polly Corporation and interpret them. Balance Sheet for Polly Corporation
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Balance Sheet for Polly Corporation (in millions)
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Assets Cash and marketable securities Accounts receivable Inventories Net fixed assets Total assets Liabilities and Shareholders Equity Accounts payable Short-term debt Long-term debt Shareholders' equity Total liabilities and shareholders equity Income Statement for Polly Corporation in millions) Revenue 150 320 430 700 $1600 $ 350 100 300 850 $1600 $4500 2800 1700 1200 Cost of goods sold Gross profit Operating expenses Earnings before interest costs and taxes (EBIT) Interest Earnings before taxes Taxes Earnings after taxes 500 50 450 200 250
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