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56% Lost: Pand con ? Operating profil Combined leverage - Operating leverage > Financial leverage 6,00,000 5,00.000 Calculation of financial leverage -1.25 Contribution 10,00,000 5 only Operating Profit 2 5,00,000 Calculation of financial leverage Earning before Interest and Tax (EBIT) 5,00,000 Less: Interest on Debenture (8% of 12,50,000) 1,00,000 17 Earnings before Tax 4.00,000 Operating leverage Operating Profit 5,00,000 Earning Before Tax 4,00,000 Combined leverage - 2 * 1.25 - 2.5 Exercise 5 Calculate the operating, financial and combined leverage under situations 1 and 2 and the financial plans for X and Y respectively from the following information relating to the operating and capital structure of a company, and also find out which gives the highest and the least value ? Installed capacity is 5000 units. Annual Production and sales at 60% of installed capacity Selling price per unit Rs. 25 Variable cost per unit Rs. 15 Fixed cost: Situation Rs 10,000 Situation Rs. 12,000 Financial Management Capital structure Links Address