Question 5 A company had the following balance sheet as on 31 March, 2021: Lisbilities Pin Crores Assets 7.50 Building ein Crores Equity Share Capital (75 lakhs Shares of 10 each) Reserves and Surplus 15% Debentures Current Liabilities 12.50 1.50 Machinery 15.00 Current Assets 6.25 6.00 Stock 3.00 Debtors Bank Balance 3.25 5.00 30.00 30.00 The additional information given is as under: Fixed cost per annum (excluding interest) 76 crores Variable operating cost ratio 60% Total assets turnover ratio 2.5 Income-tax rate 40% Calculate the following and comment: ) Earnings per share (#) Operating Leverage (ii) Financial Leverage (iv) Combined Leverage
Question 5 A company had the following balance sheet as on 31 March, 2021: Lisbilities Pin Crores Assets 7.50 Building ein Crores Equity Share Capital (75 lakhs Shares of 10 each) Reserves and Surplus 15% Debentures Current Liabilities 12.50 1.50 Machinery 15.00 Current Assets 6.25 6.00 Stock 3.00 Debtors Bank Balance 3.25 5.00 30.00 30.00 The additional information given is as under: Fixed cost per annum (excluding interest) 76 crores Variable operating cost ratio 60% Total assets turnover ratio 2.5 Income-tax rate 40% Calculate the following and comment: ) Earnings per share (#) Operating Leverage (ii) Financial Leverage (iv) Combined Leverage
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 5
A company had the following balance sheet as on 31t March, 2021:
Liebilities
in Crores Assets
7.50 Building
in Crores
Equity Share Capital (75 lakhs Shares of
10 each)
Reserves and Surplus
12.50
1.50 Machinery
15.00 Current Assets
6.00 Stock
6.25
15% Debentures
Current Liabilities
3.00
Debtors
3.25
Bank Balance
5.00
30.00
30.00
The additional information given is as under:
Fixed cost per annum (excluding interest)
76 crores
Variable operating cost ratio
60%
Total assets turnover ratio
2.5
Income-tax rate
40%
Calculate the following and comment:
(1) Earnings per share
(i) Operating Leverage
(ii) Financial Leverage
(iv) Combined Leverage
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