2A2G A SUMMARY OF THE INCOME STATEMENT OF SAHARA COMPANY IS SHOWN BEL...
38.
CSO: 2A2b
LOS: 2A2g
A summary of the Income Statement of Sahara Company is shown below.
Sales
$15,000,000
Cost of sales
9,000,000
Operating expenses
3,000,000
Interest expense
800,000
Taxes
880,000
Net income
$ 1,320,000
Based on the above information, Sahara’s degree of financial leverage is
a.
0.96.
b.
1.36.
c.
1.61.
d.
2.27.