Income statements for Siam Foods, Inc. from 2014 to 2016 appear below.Siam Foods, Inc.Annual Income StatementsFor the Years 2014 to 2016 ($ in millions)2014RevenueVariable CostsFixed Costsa.2015 20162,544 2,848 3,2761,908 2,136 2,45712812812858411546918828115266Earnings Before Interest and TaxesInterest ExpenseIncome Before Income TaxesProvision for Income TaxesNet IncomePreferred Dividend15Net Income Available to Common Shareholders 221Shares OutstandingEarnings Per ShareTax Rate508115393157236691115576230346153311501501501.47 1.78 2.2040.00% 40.00% 40.00%Enter the data into your worksheet and calculate the degree ofoperating 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 beenincreasing or decreasing over this period?d. Create a line chart that shows how the various leverage measures havechanged over this three-year period.

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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 ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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
Revenue
Variable Costs
Fixed Costs
a.
2015 2016
2,544 2,848 3,276
1,908 2,136 2,457
128
128
128
584
115
469
188
281
15
266
Earnings Before Interest and Taxes
Interest Expense
Income Before Income Taxes
Provision for Income Taxes
Net Income
Preferred Dividend
15
Net Income Available to Common Shareholders 221
Shares Outstanding
Earnings Per Share
Tax Rate
508
115
393
157
236
691
115
576
230
346
15
331
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.

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