Following is the balance sheet of S & Co. Liabilities Amount Equity share capital 12% Debenture...

 

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Following is the balance sheet of S & Co. Liabilities Amount Equity share capital 12% Debenture Reserve Current liabilities Assets 1,00,000 Fixed assets 80,000 Current assets 40,000 60,000 2,80,000 Amount 2,20,000 60,000 2,80,000 The company's total assets turnover is 2 times; fixed operating cost is Rs.1,25,000; Variable operating cost is Rs 40% of sales. Tax rate is 25%. Compute degree of financial, operating and combined/composite leverages. €1 Following is the balance sheet of S & Co. Liabilities Amount Equity share capital 12% Debenture Reserve Current liabilities Assets 1,00,000 Fixed assets 80,000 Current assets 40,000 60,000 2,80,000 Amount 2,20,000 60,000 2,80,000 The company's total assets turnover is 2 times; fixed operating cost is Rs.1,25,000; Variable operating cost is Rs 40% of sales. Tax rate is 25%. Compute degree of financial, operating and combined/composite leverages. €1

Answer rating: 100% (QA)

To compute the degree of financial operating and combined leverages we need to use the given information and formulas Lets calculate each of them step by step 1 Degree of Financial Leverage DFL DFL me... View the full answer