Tag Archives | Financial Leverage

Financial Leverage: Impact, Degree and Limitations

After reading this article you will learn about Financial Leverage:- 1. Impact of Financial Leverage 2. Degree of Financial Leverage 3. Significance 4. Limitations. Impact of Financial Leverage: The financial leverage is used to magnify the shareholders earnings. It is based on the assumption that the fixed charges/costs funds can be obtained at a cost […]

Financial Leverage: Meaning, Types and Degree

After reading this article you will learn about Financial Leverage:- 1. Meaning of Financial Leverage 2. Types of Financial Leverage 3. Degree 4. EBIT-EPS Analysis. Meaning of Financial Leverage: Financial leverage may be expressed when the residual net income (earnings after interest and taxes and preference dividend) varies not in proportion with operating profit (EBIT). […]

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