Kalyani Publishers Financial Management Book Solution - Leverage

byKumar Nirmal Prasad -
1.
Income Statement
Particulars
Amount
(i) Sales
Less: Variable Cost
50,000
25,000
(ii) Contribution
Less: Fixed Cost
25,000
15,000
(iii) EBIT
Less: Interest
10,000
5,000
(iv) EBT
5,000

2.
Income Statement
Particulars
Amount
(i) Sales
Less: Variable Cost
10,00,000
7,00,000
(ii) Contribution
Less: Fixed Cost
3,00,000
2,00,000
(iii) EBIT
Less: Interest (5,00,000 x 10%)
1,00,000
50,000
(iv) EBT
50,000
3. Income Statement
Particulars
Amount
(i) Sales
Less: Variable Cost
20,00,000
14,00,000
(ii) Contribution
Less: Fixed Cost
6,00,000
4,00,000
(iii) EBIT
Less: Interest (10,00,000 x 10%)
2,00,000
1,00,000
(iv) EBT
1,00,000
4. [a]
Income Statement
Particulars
Amount
(i) Sales
Less: Variable Cost
5,00,000
3,00,000
(ii) Contribution
Less: Fixed Cost
2,00,000
1,20,000
(iii) EBIT
80,000
4. [b]


EBIT (Opening worth)
Less: Interest @ 12% (1,50,00,000)
40,00,000
18,00,000
EBT

22,00,000

1.81
5. [a]
Income Statement
Particulars
Honey Ltd.
Money Ltd.
EBIT (1,00,00,000 x 20%)
Less: Interest on Debentures
20,00,000
-
20,00,000
6,00,000
EBIT
Less: Tax @ 50%
20,00,000
10,00,000
14,00,000
7,00,000
Amount of Profit available Equity Shareholder’s
10,00,000
7,00,000
[b]
Particulars
Honey Ltd.
Money Ltd.
No of Equity Share
E/S = a / b
10,00,000
5,00,000
6.
Particulars
Output 6,000
Output 6,300
Sales
Less: Variable Cost
7,20,000
4,20,000
7,56,000
4,41,000
Contribution
Less: Fixed Cost
3,00,000
2,00,000
3,15,000
2,00,000
EBIT
1,00,000
1,15,000
7.
Income Statement
Particulars
Output (1,00,000 units)
(i) Sales
Less: Variable Cost
2,00,000
70,000
(ii) Contribution
Less: Fixed Cost
1,30,000
65,000
(iii) EBIT
Less: Interest Charges
65,000
15,000
(iv) EBT
50,000
8.
Break Even point = No. of Profit / No. of Loss.
Particulars
(2,500 Units)
(3,000 Units )
Sales @ 14 per unit
Less: Variable Cost
35.000
22,500
42,000
27,000
Contribution
Less: Fixed Cost
12,500
10,000
15,000
10,000
EBIT
2,500
5,000
9.
Particulars
Amount
Sales
Less: Variable Cost (0.70)
2,00,000
70,000
Contribution
Less: Fixed Cost
1,30,000
1,00,000
EBIT
Less: Interest Charge
30,000
3,668
EBT
26,332
10.
Income Statement
Particulars
(50,000 Units)
(60,000 Units )
Sales @ 10% per unit
Less: Variable Cost
5,00,000
3,00,000
6,00,000
3,60,000
Contribution
Less: Fixed Cost
2,00,000
1,00,000
2,40,000
1,00,000
EBIT
Less: Interest (2,00,000 x 10%)
1,00,000
20,000
1,40,000
20,000
EBT
Less: Tax 50%
80,000
40,000
1,20,000
60,000
Amount of Profit available Equity Shareholders
40,000
60,000
11.
Particulars
Financial Plan I
Financial Plan II

Situation A
Situation B
Situation A
Situation B
Sales (800 x 20)
Less: Variable Cost (800 x 15)
16,000
12,000
16,000
12,000
16,000
12,000
16,000
12,000
Contribution
Less: Fixed Cost
4,000
800
4,000
1,500
4,000
800
4,000
1,500
EBIT
Less: Interest on Debt 10%
3,200
500
2,500
500
3,200
200
2,500
200
EBT
2,700
2,000
3,000
2,300

Financial Leverage


Operating Leverage






12.
Income Statement
Particulars
(2,00,000 Units)
(2,50,000 Units )
Sales @ Rs. 10 per unit
Less: Variable Cost @ Rs. 6 per unit
20,00,000
12,00,000
25,00,000
15,00,000
Contribution
Less: Fixed Cost
8,00,000
2,50,000
10,00,000
2,50,000
EBIT
Less: Interest on Debentures (10,00,000 x 20%)
5,50,000
2,00,000
7,50,000
2,00,000
EBT
Less: Tax 50%
3,50,000
1,75,000
5,50,000
2,75,000
Amount of Profit available Equity Shareholders
1,75,000
2,75,000
13.
Income Statement
Particulars
Amount
Sales
Less: Variable Cost @ 40%
6,00,000
2,40,000
Contribution
Less: F/C
3,60,000
1,00,000
EBIT
Less: Interest (80,000 x 10%)
2,60,000
8,000
EBT
2,52,000
Less: Tax @ 50%
Amount of profit available
1,26,000
1,26,000


Particulars
Amount
EPS
No. of Shares
Rs. 5
6,000
Amount of Profit available Shareholder’s
(6,000 x 5)
Add: Tax @ 50%
30,000

30,000
EBT
Add: Interest (80,000 x 10%)
60,000
8,000
EBIT
Add: F/C
68,000
1,00,000
Contribution
Add: V/C
1,68,000
1,12,000
Sales
2,80,000

14.
Income Statement of Company A
Particulars
Amount
(i) Sales
Less: Variable Cost
4,500

3,000
(ii) Contribution
Less: Fixed Cost
1,500
1,200
(iii) EBIT
Less: Interest
300
200
(iv) EBT
Less: Tax @ 50
100
50
Available Profit for shareholders
50

Income Statement of Company B
Particulars
Amount
(i) Sales
Less: Variable Cost
9,600

7,200
(ii) Contribution
Less: Fixed Cost
2,400
2,000
(iii) EBIT
Less: Interest
400
300
(iv) EBT
Less: Tax @ 50
100
50
Available Profit for shareholders
50


Income Statement of Company C
Particulars
Amount
(i) Sales
Less: Variable Cost
8,000

4,000
(ii) Contribution
Less: Fixed Cost
4,000
2,000
(iii) EBIT
Less: Interest
2,000
1,000
(iv) EBT
Less: Tax @ 50%
1,000
500
Available Profit for shareholders
500
15.
Financial Plan I
Financial Plan II
Financial Plant III
Particulars
Situation A
Situation B
Situation C
Situation A
Situation B
Situation C
Situation A
Situation B
Situation C
(i) Sales
(800 x 15)
Less: V/C @ 10 (800 x 10)

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000

12,000


8,000
Contribution
Less: F.C
4,000
1,000
4,000
2,000
4,000
3,000
4,000
1,000
4,000
2,000
4,000
3,000
4,000
1,000
4,000
2,000
4,000
3,000
(ii) EBIT
Less: Interest     @ 12%
3,000


600
2,000


600
1,000


600
3,000


300
2,000


300
1,000


300
3,000


900
2,000


900
1,000


900
(iii) EBT
2,400
1,400
400
2,700
1,700
700
2,100
1,100
100


= 1.3

= 2

= 4

= 1.3

= 2

= 4

= 1.3

= 2

= 4
= 1.25
= 1.42
= 2.5
= 1.11
= 1.17
= 0.14
=1.42
= 1.81
= 10
= 1.67
= 1.42
= 10
= 1.48
= 2.35
= 5.71
= 1.90
= 3.61
= 4
Tags

Posted by Kumar Nirmal Prasad