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TABLE 5–4 Abbreviated Income Statement The Van Accessible Corp All figures in $thousands except Earnings Per Share 31-Dec-13 31-Dec-12 Total revenue Cost of Revenue Gross Profit 1,789,654 478,963 1,310,691 65,987 1,244,704 544,444 700,260 14.01 703,904 275,963 427,941 57,896 370,045 289,635 80,410 1.61 Operating Expenses Operating Income Interest and Taxes Net Income Earnings Per Share 50,000,000 Shares outstanding

TABLE 5–4 Abbreviated Income Statement The Van Accessible Corp All figures in $thousands except Earnings Per Share 31-Dec-13 31-Dec-12 Total revenue Cost of Revenue Gross Profit 1,789,654 478,963 1,310,691 65,987 1,244,704 544,444 700,260 14.01 703,904 275,963 427,941 57,896 370,045 289,635 80,410 1.61 Operating Expenses Operating Income Interest and Taxes Net Income Earnings Per Share 50,000,000 Shares outstanding

Essentials Of Investments
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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Using the Van Accessible data from Table 5–4: 

  1. Calculate the degree of operating leverage (DOL). 
  2. Calculate the degree of financial leverage (DFL). 
  3. Calculate the degree of combined leverage (DCL). 
  4. Explain what DOL, DFL, and DCL mean.



TABLE 5–4 Abbreviated Income Statement The Van Accessible Corp All figures in $thousands except Earnings Per Share 31-Dec-13 31-Dec-12 Total revenue Cost of Revenue Gross Profit 1,789,654 478,963 1,310,691 65,987 1,244,704 544,444 700,260 14.01 703,904 275,963 427,941 57,896 370,045 289,635 80,410 1.61 Operating Expenses Operating Income Interest and Taxes Net Income Earnings Per Share 50,000,000 Shares outstanding DOL = 1.5324 DFL = 3.2613 %3D DCL = 5.00
Transcribed Image Text:TABLE 5–4 Abbreviated Income Statement The Van Accessible Corp All figures in $thousands except Earnings Per Share 31-Dec-13 31-Dec-12 Total revenue Cost of Revenue Gross Profit 1,789,654 478,963 1,310,691 65,987 1,244,704 544,444 700,260 14.01 703,904 275,963 427,941 57,896 370,045 289,635 80,410 1.61 Operating Expenses Operating Income Interest and Taxes Net Income Earnings Per Share 50,000,000 Shares outstanding DOL = 1.5324 DFL = 3.2613 %3D DCL = 5.00
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