Below is information on three medical equipment suppliers: Stryker Medtronic Zimmer Industry average Average selling price 43,750
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Below is information on three medical equipment suppliers:
Stryker | Medtronic | Zimmer | Industry average | |
Average selling price | 43,750 | 33,750 | 65,000 | 37,500 |
Units sold | 1,875 | 2,312 | 1,063 | 1,563 |
Interest expense | 937,500 | 1,250,000 | 3,750,000 | 1,875,000 |
Variable costs (% of sales) | 60% | 45% | 40% | 48% |
Fixed costs | 12,500,000 | 8,750,000 | 25,000,000 | 13,750,000 |
Preferred dividends | 1,250,000 | 0 | 750,000 | 375,000 |
Common actions | 6,250,000 | 10,000,000 | 3,750,000 | 8,750,000 |
Using the information given in the table above, prepare income and expense statements for each company and the industry average in Excel. Suppose that each faces a tax rate of 30%.
Calculate the breakeven points in units and dollars and the degrees of operating, financial and combined leverage for each of the companies and the industry average in Excel.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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