The income statement from 2013 to 2017 of Kung Food Equipment, Inc., a restaurant equipment supplier,...

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The income statement from 2013 to 2017 of Kung Food Equipment, Inc., a restaurant equipment supplier, appears below. Revenue Cost of Revenue, Total Gross Profit Selling/General/Admin. Exp. Research & Development Exp. Net Operating Income Other Income, Net EBIT Interest Expense Pre-tax Income Income Tax Total Net Income Less: Preferred Dividends Net Income Available to Common Common Shares Outstanding (M) Earnings per Share Kung Food Equipment, Inc. Annual Income Statements For the Years 2013 to 2017 (U.S. SMillions) Dec-17 59,200 41,440 17,760 9,380 1,500 6,880 100 6,980 1,400 5,580 2,232 3,348 1,500 1,848 1,000 $1.85 Dec-16 49,700 34,790 14,910 7,955 1,500 5,455 100 5,555 1,200 4,355 1,742 2,613 1,200 1,413 1,000 $1.41 Dec-15 48,300 33,810 14,490 7,745 1.500 5,245 100 5,345 1,200 4,145 1,658 2.487 1,000 1.487 1,000 $1.49 Dec-14 41,700 29,190 12,510 6,755 1,500 4,255 100 4,355 1,100 3,255 1,302 1,953 800 1,153 1,000 $1.15 Dec-13 35,400 24,780 10,620 5,810 1,500 3,310 100 3,410 800 2,610 1,044 1,566 500 1,066 1,000 $1.07 a) Enter the data into your worksheet. Costs of revenues are variable costs. Also, research & development expenses are fixed costs. Finally, $500M of selling/general/administrative expenses constitute fixed costs while the rest are variable costs. b) Determine the degree of operating, financial, and combined leverage for each year. c) Create a Line chart that shows how the various leverage measures have changed over this five-year period. The income statement from 2013 to 2017 of Kung Food Equipment, Inc., a restaurant equipment supplier, appears below. Revenue Cost of Revenue, Total Gross Profit Selling/General/Admin. Exp. Research & Development Exp. Net Operating Income Other Income, Net EBIT Interest Expense Pre-tax Income Income Tax Total Net Income Less: Preferred Dividends Net Income Available to Common Common Shares Outstanding (M) Earnings per Share Kung Food Equipment, Inc. Annual Income Statements For the Years 2013 to 2017 (U.S. SMillions) Dec-17 59,200 41,440 17,760 9,380 1,500 6,880 100 6,980 1,400 5,580 2,232 3,348 1,500 1,848 1,000 $1.85 Dec-16 49,700 34,790 14,910 7,955 1,500 5,455 100 5,555 1,200 4,355 1,742 2,613 1,200 1,413 1,000 $1.41 Dec-15 48,300 33,810 14,490 7,745 1.500 5,245 100 5,345 1,200 4,145 1,658 2.487 1,000 1.487 1,000 $1.49 Dec-14 41,700 29,190 12,510 6,755 1,500 4,255 100 4,355 1,100 3,255 1,302 1,953 800 1,153 1,000 $1.15 Dec-13 35,400 24,780 10,620 5,810 1,500 3,310 100 3,410 800 2,610 1,044 1,566 500 1,066 1,000 $1.07 a) Enter the data into your worksheet. Costs of revenues are variable costs. Also, research & development expenses are fixed costs. Finally, $500M of selling/general/administrative expenses constitute fixed costs while the rest are variable costs. b) Determine the degree of operating, financial, and combined leverage for each year. c) Create a Line chart that shows how the various leverage measures have changed over this five-year period.

Answer rating: 100% (QA)

a To enter the data into a worksheet you can create a table with the following columns Year Revenue Cost of Revenue Variable Gross Profit SellingGener... View the full answer