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  • Assignment - AFM 3.2

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    bhupendra patel
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    The balance sheet shows the company has Rs. 2,00,000 total assets comprised of Rs. 1,50,000 fixed assets, Rs. 50,000 current assets, Rs. 60,000 equity capital, Rs. 80,000 10% debentures, and Rs. 20,000 retained earnings, with Rs. 40,000 current liabilities. The document also provides information on the company's total assets turnover, fixed and variable operating costs, and tax rate to calculate different types of leverages and determine the EBIT level for different EPS values.

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    Assignment_AFM 3.2

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    The balance sheet shows the company has Rs. 2,00,000 total assets comprised of Rs. 1,50,000 fixed assets, Rs. 50,000 current assets, Rs. 60,000 equity capital, Rs. 80,000 10% debentures, and Rs. 20,000 retained earnings, with Rs. 40,000 current liabilities. The document also provides information on the company's total assets turnover, fixed and variable operating costs, and tax rate to calculate different types of leverages and determine the EBIT level for different EPS values.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views2 pages

    Assignment - AFM 3.2

    Uploaded by

    bhupendra patel
    The balance sheet shows the company has Rs. 2,00,000 total assets comprised of Rs. 1,50,000 fixed assets, Rs. 50,000 current assets, Rs. 60,000 equity capital, Rs. 80,000 10% debentures, and Rs. 20,000 retained earnings, with Rs. 40,000 current liabilities. The document also provides information on the company's total assets turnover, fixed and variable operating costs, and tax rate to calculate different types of leverages and determine the EBIT level for different EPS values.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    The Balance Sheet of a company is as under:

    Rs. Rs.
    Equity Capital (Rs. 10) 60,000 Fixed Assets 1,50,000
    10% Debentures 80,000 Current Assets 50,000
    Retained Earnings 20,000
    Current Liabilities 40,000
    2,00,000 2,00,000
    LEVERAGE ANALYSIS 155

    its fixed operating cost is Rs.


    The company's total assets turnover is 3 times;
    of sales. Tax rate is 50%.
    1,00,000 and its variable operating cost is 40%
    (i) Calcuate all three types ofleverages
    Determine the likely level of EBIT if EPS is (a) Re. 1, (b)
    Rs. 3 and (c) zero.
    Ans. (i) OL 1.385; FL 1.032; CL 1.429; (ii) EBIT in case: (a) Rs. 20,000,
    =
    = = (b)
    Rs. 44,000, (c) Rs. 8,000.
    Use formula EPSx N =(EBIT I ) (1 - T) -

    Pd

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