Ames Drilling Corp.reported that its sales and EBIT increased by 10%,but its EPS increased by 30%.The much larger change in earnings per share could be the result of
A) high operating leverage.
B) high financial leverage.
C) a high percentage of credit sale collections from prior years.
D) high fixed costs of production.
Correct Answer:
Verified
Q64: An increase in financial leverage will increase
Q65: If a firm's production process requires high
Q69: Operating leverage is measured as the responsiveness
Q71: All of the following are likely to
Q72: A company that sells preferred stock and
Q73: The presence of debt and/or preferred stock
Q78: Operating leverage contributes ultimately to the variability
Q79: A company that sells common stock and
Q80: The more fixed-charge securities (such as bonds
Q99: Which of the following transactions will lower
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents