|
|
1. Given the data
below:
Selling price per unit Rs.120, Variable cost per unit Rs.80, Fixed cost Rs.6,00,000
Interest Rs.2 lakhs, Number of units sold 30,000, Calculate the three types
of leverages. [Oct.'01]
2. From the following data calculate
financial, operating and combined leverage. Sales 10,000 units, Rs.25 per unit as the selling price. Variable cost Rs.5 per unit Fixed cost Rs.30,000. Interest cost Rs.15,000. [Ap. '02] 3. A firm has sales of Rs.10,00,000, Variable cost Rs.7,00,000, fixed cost Rs.2,00,000 and Rs.5,00,000 debt at 10% interest. What are the operating, financial and combined leverages? [Nov. '99] 4. From the following information calculate: Financial leverage, Operating leverage and combined leverage Sales Rs.9,60,000, Variable cost Rs. 5,60,000, Fixed cost Rs. 2,40,000 Interest Rs.60,000, Tax Rs.50,000. [Ap. '00, Oct. '02] 5. NEKO Ltd. has a capital of Rs.50,00,000. The EBIT are Rs.10,00,000. What would be its financial leverage [DFL]? Assuming the EBIT being Rs.7,50,000 and Rs.12,50,000, how would the EPS be affected? Assume a tax rate of 50%. The equity share value of Rs.10 each. [Ap. '99] 6. Total sales of a company Rs. 5,00,000, Total variable cost Rs. 3,00,000 Total fixed cost Rs.1,00,000, 6% Debenture capital is Rs.10,00,000. Find three leverages [Oct. '00] 7. The Earnings After Tax (EAT) is Rs.61,500. Income Tax rate is 38.5%. Interest is Rs.20,000 find out EBIT [Oct. '01, '02] |
|
Particulars
|
P
|
Q
|
R
|
| Output [Units] |
3,00,000
|
75,000
|
5,00,000
|
| Fixed cost |
Rs.3,50,000
|
Rs.7,00,000
|
Rs.75,000
|
| Unit Variable cost |
Re.1.00
|
Rs.7.50
|
Re.0.10
|
| Interest Expenses |
Rs.25,000
|
Rs.40,000
|
NIL
|
| Unit selling price |
Rs.3
|
Rs.25
|
Re.0.50
|
9. The following details relate to X Ltd.
Selling price per unit Rs.120
Variable cost per unit Rs.70
Total fixed cost Rs.2,00,000
Interest Rs.20,000
A] What are the operating and financial leverages when X Ltd. produces and sells 6,000 units
B] What is the % change that will occur in the EBIT of X Ltd. if the output increases by 5%
10. Calculate operating, financial and combined leverages under situations where the fixed cost A] Rs.5,000 & B] Rs.10,000 and Financial plans I & II respectively from the following data
Total assets Rs.30,000
Total assets turnover 2
Variable cost as a % of sales 60
|
Financial Plan
|
||
|
I
|
II
|
|
| Equity |
Rs.30,000
|
Rs.10,000
|
| 10% debentures |
Rs.10,000
|
Rs.30,000
|
11. Calculate all leverages under situations A,B, & C and Financial Plans I,II, & III respectively from the following information
Installed capacity 1,200 units, Actual production and sales 800 units
Selling price per unit Rs.15, Variable cost per unit Rs.10
Fixed cost : Situation A - Rs.1,000
Situation B - Rs.2,000
Situation C - Rs.3,000
|
Capital structure
|
Plan I
|
Plan II
|
Plan III
|
| Equity (Rs.) |
5,000
|
7,500
|
2,500
|
| Debt (Rs.) |
5,000
|
2,500
|
7,500
|
Cost of debt 12%
12. The capital structure of Priya Ltd. consists of Equity share capital of Rs.10,00,000 and Rs.10,00,00 of 10% debentures. Sales increase from 1,00,000 to 1,20,000 units
The existing selling price is Rs.10 per unit
The variable cost amounted to Rs.6 per unit
Fixed cost amounted to Rs.2,00,000
The income tax rate is 50%
You are required to calculate
A] percentage increase in EPS assuming that the face value of each share is Rs.100
B] degree of financial leverage at 1,00,000 and 1,20,000 units
C] degree of operating leverage at 1,00,000 and 1,20,000 units
13. ABC Ltd. provide the following data
Variable cost as % of sales 50
Interest Rs.40,000
Degree of operating leverage 3
Degree of financial leverage 2
Tax rate 50%
Prepare the income statement
14. The following is the Balance sheet of a Company
|
Liabilities
|
Rs.
|
Assets
|
Rs.
|
| Equity capital [@Rs.10 per share] |
60,000
|
Fixed assets |
1,50,000
|
| 10% Long term debt |
80,000
|
Current assets |
50,000
|
| Retained earnings |
20,000
|
||
| Current Liabilities |
40,000
|
||
|
2,00,000
|
2,00,000
|
The company's total asset turnover ratio is 3
Its fixed operating costs are Rs.1,00,000
Variable operating cost ratio is 40%
The income tax rate is 50%
I] calculate all the types of leverages
II] determine the likely level of EBIT if EPS is
a] Re.1.00
b] Rs.3.00
c] Re.0
15. ABC Ltd. has an EBIT of Rs.1,60,000. Its capital structure consists of the following securities
10% debentures Rs.5,00,000
12% Preference shares Rs.1,00,000
Equity shares of Rs.100 each Rs.4,00,000
The company is in the 55% tax bracket. You are required to determine
(i) The company's EPS
(ii) The percentage change in EPS associated with 30% increase and 30% decrease in EBIT
(iii) The degree of financial leverage