Given the following financial data for Cosmos, compute the firm's degree of combined leverage. 2010 2011 Sales $780,000 $874,000 Fixed costs 195,000 218,500 Variable costs 460,200 524,400 EBIT 124,800 131,100 Interest 46,800 52,400 EPS $0.42 $0.51

Given the following financial data for Cosmos, compute the firm's degree of combined leverage. 2010 2011 Sales $780,000 $874,000 Fixed costs 195,000 218,500 Variable costs 460,200 524,400 EBIT 124,800 131,100 Interest 46,800 52,400 EPS $0.42 $0.51

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 6P

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Question

Given the following financial data for Cosmos, compute the firm's degree of combined leverage.

	2010	2011
Sales	$780,000	$874,000
Fixed costs	195,000	218,500
Variable costs	460,200	524,400
EBIT	124,800	131,100
Interest	46,800	52,400
EPS	$0.42	$0.51

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