Please no excel. Type or Handwrite. Would appreciate proper finance formulas & clear explanation. Thanks

Problem 2 (18 marks) You have been provided the following income statements for SpongeBob SquarePants Industries and Hello Kitty Incorporated. Sales Cost of Goods Sold Fixed costs Depreciation Ea mings Before Interest and Taxes Interest Income Before Taxes Income Taxes Net Income Shares o/s EPS Sponge Bob Hello Kitty 20 B Income Statement (5000) 3,780 11268 9,0 D 5,406 3.250 1950 2.450 1470 4,070 2.442 3.065 1839 L005 603 402 211 603 392 100 65 6.03 6.03 a. Calculate the degree of operating leverage for each firm. Show your work! (4 marks) b. Calculate the degree of financial leverage for each firm. Show your work! (4 marks) C. Calculate the degree of combined leverage for each firm. Show your work! (4 marks) d. If both firms were to experience a 15% increase in sales, what is the percentage change impact in the EPS and what is the new EPS for each firm. Show your work! (4 marks) a. Calculate the degree of operating leverage for each firm. Show your work! (4 marks) b. Calculate the degree of financial leverage for each firm. Show your work! (4 marks) Calculate the degree of combined leverage for each firm. Show your work! (4 marks) d. If both firms were to experience a 15% increase in sales, what is the percentage change impact in the EPS and what is the new EPS for each firm. Show your work! (4 marks) e. Which firm is more risky? Explain! (2 marks)