Income statements for Siam Foods, Inc. from 2014 to 2016 appear below. Siam Foods, Inc. Annual Income Statements For the Years 2014 to 2016 ($ in millions) 2014 2015 2016 Revenue Variable Costs Fixed Costs Earnings Before Interest and Taxes Interest Expense Income Before Income Taxes Provision for Income Taxes Net Income Preferred Dividend Net Income Available to Common Shareholders_221 Shares Outstanding Earnings Per Share Tax Rate 2,544 2,848 3,276 1,908 2,136 2,457 128 128 128 584 691 115 115 393 469 576 157 188 230 236 281 346 15 15 15 266 331 508 115 150 150 150 1.47 1.78 2.20 40.00% 40.00% 40.00% Enter the data into your worksheet and calculate the degree of operating leverage for each year. b. Calculate the degree of financial leverage for each year. c. Calculate the degree of combined leverage for each of the three years. Does it appear that Siam Food's leverage measures have been increasing or decreasing over this period? d. Create a line chart that shows how the various leverage measures have changed over this three-year period.
Income statements for Siam Foods, Inc. from 2014 to 2016 appear below. Siam Foods, Inc. Annual Income Statements For the Years 2014 to 2016 ($ in millions) 2014 2015 2016 Revenue Variable Costs Fixed Costs Earnings Before Interest and Taxes Interest Expense Income Before Income Taxes Provision for Income Taxes Net Income Preferred Dividend Net Income Available to Common Shareholders_221 Shares Outstanding Earnings Per Share Tax Rate 2,544 2,848 3,276 1,908 2,136 2,457 128 128 128 584 691 115 115 393 469 576 157 188 230 236 281 346 15 15 15 266 331 508 115 150 150 150 1.47 1.78 2.20 40.00% 40.00% 40.00% Enter the data into your worksheet and calculate the degree of operating leverage for each year. b. Calculate the degree of financial leverage for each year. c. Calculate the degree of combined leverage for each of the three years. Does it appear that Siam Food's leverage measures have been increasing or decreasing over this period? d. Create a line chart that shows how the various leverage measures have changed over this three-year period.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter4: Profitability Analysis
Section: Chapter Questions
Problem 23PC
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