Page 390 - Corporate Finance PDF Final new link

390 Corporate Finance BRILLIANT’S

EAT 16,80,000
Less: Preferential Dividend (10% of 10,00,000) 1,00,000
Net Earning available to Equity Shareholder 15,80,000

Contribution 40,00,000
Operating Leverage =   1.333
EBIT 30,00,000

EBIT 30,00,000
Financial Leverage =   1.071
EBT 28,00,000

Combined Leverage = O.L × F.L. = 1.333 × 1.071 = 1.428 approx.
Alternatively,

Contribution 40,00,000
Combined Leverage = = = 1.428
EBT 28,00,000
Illustration 4.3.2 NPP

Following is the Balance Sheet of a company: / ZrMo EH$ H§$nZr H$s ~¡b|g erQ> Xr J¶r h¢…
Balance Sheet / ~¡b|g erQ>
(as on 31st March, 2018) / 31 ‘mM© 2018 H$mo

Particulars Amount Particulars Amount
({ddaU) (am{e) ({ddaU) (am{e)
` `

8,000 Equity Shares / B{³dQ>r eo¶g© 8,00,000 Fixed Assets / {’$³ñS> AgoQ²>g 9,60,000
10% Debentures / {S>~|Mg© 3,20,000 Current Assets / H$a§Q> AgoQ²>g 3,20,000

Profit & Loss A/c / bm^ VWm hm{Z ImVm 1,28,000
Creditors / H«o${S>Q>g© 32,000
12,80,000 12,80,000

The company's total assets turnover ratio is 3 times and fixed cost is ` 7,20,000. Profit volume
ratio is 50%. Tax rate is 30%. Calculate Operating, Financial and Combined Leverage. If EPS is ` 21,
find out EBIT.
H§$nZr H$m Hw$b AgoQ²>g Q>Z©Amoda aoemo 3 JwZm h¡ VWm {’$³ñS> H$m°ñQ> < 7,20,000 h¡& àm°{’$Q> dm°ë¶y‘ aoemo 50%
h¡& Q>¡³g aoQ> 30% h¡& Am°naoqQ>J, ’$m¶Z|{e¶b VWm H§$~mB§S> brdaoO H$s JUZm H$s{OE& ¶{X B©nrEg < 21 h¡, B©~rAmB©Q>r
kmV H$s{OE&