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  • Assignment - AFM 3.1

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    bhupendra patel
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    Company X had variable costs of 50% of sales, interest expenses of Rs. 20,000, an operating leverage of 3-1, and a financial leverage of 2-1. Company Y had variable costs of 60% of sales, interest expenses of Rs. 6,000, an operating leverage of 5-1, and a financial leverage of 3-1. The earnings after tax for Company X was Rs. 9,000 and Rs. 1,350 for Company Y.

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    Company X had variable costs of 50% of sales, interest expenses of Rs. 20,000, an operating leverage of 3-1, and a financial leverage of 2-1. Company Y had variable costs of 60% of sales, interest expenses of Rs. 6,000, an operating leverage of 5-1, and a financial leverage of 3-1. The earnings after tax for Company X was Rs. 9,000 and Rs. 1,350 for Company Y.

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    4 views1 page

    Assignment - AFM 3.1

    Uploaded by

    bhupendra patel
    Company X had variable costs of 50% of sales, interest expenses of Rs. 20,000, an operating leverage of 3-1, and a financial leverage of 2-1. Company Y had variable costs of 60% of sales, interest expenses of Rs. 6,000, an operating leverage of 5-1, and a financial leverage of 3-1. The earnings after tax for Company X was Rs. 9,000 and Rs. 1,350 for Company Y.

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    © All Rights Reserved
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    8.

    From the following financial data of companies X and Y for the year ending 31st
    March, 2004, prepare their income statements
    X Y
    Variable costs as % of sales 50 60
    Interest expenses Rs. 20,000 Rs. 6,000
    Operating leverage 3-1 5-1
    Finarcial leverage 2-1 3-1
    Income tax rate 55%.
    Ans. EAT of companies X and Y are Rs. 9,000 and Rs. 1,350 respectively.

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