Question

Income statements for two different companies in the same industry are as follows:
Required:
1. Compute the degree of operating leverage for each company.
2. Compute the break-even point for each company. Explain why the break-even point for Quintex, Inc., is higher.
3. Suppose that both companies experience a 50 percent increase in revenues. Compute the percentage change in profits for each company. Explain why the percentage increase in Quintex’s profits is so much greater than that of Trimax.


$1.99
Sales2
Views48
Comments0
  • CreatedSeptember 01, 2015
  • Files Included
Post your question
5000