Learning Curve…

MB0045 : Given the following information, calculate Degree of operating leverage, Degree of Financial leverage, Degree of total leverage.

Posted on: September 21, 2011

MB0045  : Given the following information, calculate Degree of operating leverage, Degree of Financial leverage, Degree of total leverage.
 

Quantity sold                               100,000 units

Variable cost per unit     200

Selling price                                 800

Fixed cost                                     10,000

Number of equity shares            50,000

Debt                                              1000,000 @ 15%pa

Preference shares                        10,000 of Rs.100 each @ 10%

Tax rate                                        30%

Solution:

To Find out Degree of Operating Leverage

DOL   = {Q(S–V)} / {Q(S–V)–F}

                                                = {100,000 (800 – 200)} / 100,000 (800 – 200) – 10,000

                                                = 60,000,000 / 59,990,000

                                                = 1.00016

To Find out Degree of Financial Leverage

DFL    = EBIT ÷ {EBIT—I—{Dp/(1-T)}}

                                                = 59,990,000 ÷ {59,990,000 – 150,000 – {100,000/1-0.30}

                                                = 59,990,000 ÷59,697,142.86

                                                = 1.0049

To Find out Degree of Total Leverage

                                    DTL    = DOL*DFL

                                                = 1.00016*1.0049

                                                = 1.0050

DTL    = Q(S – V) / Q(S – V) – F – I – {DP / (1 – T)}

= 60,000,000 / 60,000,000 – 10,000 – 150,000 – {100,000/0.7}

= 1.0050

Advertisements

7 Responses to "MB0045 : Given the following information, calculate Degree of operating leverage, Degree of Financial leverage, Degree of total leverage."

thanks alot…
plz provide all assignments

awesome …. if therez somebody a god… he sure sent u ..
thanx a lottt

hi…….remember………….gagan here frm dell….:)

call up on 9988417003

Hi please mail me MB0045 Winter 2011 Set 1 and Set 2 Answers

Sorry Neha..
Dont hv winter assingment anwsers.

Thank you so much…..see if anything could be done….have to submit my assignments in this week only MB0045 is incomplete

hi Nikhat . Found your very useful answer for MBA second sem. I need your help to complete ” Financial Management” descriptive answer on very urgent basis. Please give me your personal id so that i can mail you …please help me out.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Learning days (Calendar)

September 2011
M T W T F S S
« Aug   Oct »
 1234
567891011
12131415161718
19202122232425
2627282930  

Knowledge Bank (Archives)

I am on Twitter

Blog Stats

  • 498,754 hits

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 43 other followers

%d bloggers like this: