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guajiro [1.7K]
2 years ago
6

Calculate a company's total leverage given the following information:

Business
1 answer:
Morgarella [4.7K]2 years ago
4 0

Explanation:

Given that,

Change in sales = 3%

Change in earnings = 9%

We need to find a company's total leverage.

Total leverage is equal to the ratio of percentage change in earnings per share to percentage change in sales revenue.

\text{leverage }=\dfrac{9\%}{3\%}\\=3

Hence, company's total leverage is 3 units.

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March 15

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