# Finance 200

posted by .

11. The Sterling Tire Company’s income statement for 2008 is as follows:
Given this income statement, compute the following:

STERLING TIRE COMPANY
Income Statement
For the Year Ended December 31, 2008
Sales (20,000 tires at \$60 each) . . . . . . . . . . . . . . . . . . . . . . . . \$1,200,000
Less: Variable costs (20,000 tires at \$30) . . . . . . . . . . . . . . . 600,000
Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000
Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . 200,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Income tax expense (30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Earnings after taxes (EAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$ 105,000

a. Degree of operating leverage.
b. Degree of financial leverage.
c. Degree of combined leverage.
d. Break-even point in units.

## Similar Questions

1. ### comprehensive income

Can I please have help with the following problem. Bee Spears Clothing Stores reported sales of \$250,000 cost of goods sold of \$150,000, operating expenses of \$25,000, income tax expense rate of 30% in calendar year 2006, and an unrealized …
2. ### Account

Here is my question, please help!!! 5. Assume that Z company's chief financial officer gave you the following information: net sales, \$3,800,000; cost of goods sold, \$2,100,000; extraordinary gain (net of income taxes of of \$7,000), …
3. ### FINN 200

12. The Harmon Company manufactures skates. The company’s income statement for 2008 is as follows; Sales (20,000 tires at \$60 each) . . . . . . . . . . . . . . . . . . . . . . . . \$1,200,000 Less: Variable costs (20,000 tires at …
4. ### Finance

The Sterling Tire Company’s income statement for 2008 is as follows
5. ### Math

Staley Watch Company reported the following income statement data for a 2-year period. 2008 2009 Sales \$210,000 \$250,000 Cost of goods sold Beginning inventory 32,000 44,000 Cost of goods purchased 173,000 202,000 Cost of goods available …
6. ### accounting

O'Hara Inc. made sales of \$310,000 during 2008, it's first year of operations. Of this, \$15,000 remained in accounts receivable at the end of the year. Additionally, the company paid and incurred \$270,000 in expenses during the year. …
7. ### Accounting

Ferguson Company was started in 2008 when it acquired \$60,000 from the issue of common stock. The following data summarize the company's first years' operating activities. Assume that all transactions were cash transactions. 2008 2009 …
8. ### accounting

Income Statement Data: This year Last year Revenue \$150,000 \$120,000 Cost of Goods Sold \$90,000 \$60,000 Operating Income \$10,000 \$5,000 Income Tax Expense \$1,800 \$500 Based on a horizontal analysis of the data, which statement correctly …
9. ### Accounting

Complete the following exercise. Fill in the Excel spreadsheet provided via the link below to provide your answers to parts a and b. Then paste the Excel data into a Word document on which you can also write the answer to part c. Income …
10. ### financial accounting

Zumbrunn Company’s income statement contained the condensed information below. ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2015 Service revenue \$969,400 Operating expenses, excluding depreciation \$624,480 Depreciation …

More Similar Questions