What is Degree of financial Leverage and Degree of combined Leverage and its importance.

Q: Calculate the following ratios: return on equity, return on assets (levered), return on sales…

A: Ratio analysis helps business to know the financial position of it using the interpretation of the…

Q: What is meant by the term financial leverage?

A: Borrowed Capital: The money which is borrowed by a company from outsiders for a specified period of…

Q: A company that finances a relatively large portion of its assets with liabilities is said to have a…

A: Leverage: Leverage is a method of using of debt in an efficient way so that it can be used to…

Q: a. Degree of operating leverage. b. Degree of financial leverage. Degree of combined leverage. с.

A: Solution:- a)Calculation of Degree of operating leverage as follows under:- Degree of operating…

Q: What is a firm’s business risk? operating leverage? How does the operating leverage affect the…

A: A business can be defined as the entity or organization established to earn profit by providing…

Q: Can you please give some examples of firms whereby a positive relationship exists between operating…

A: Leverage: The term leverage, in general, refers to a relationship between two interrelated…

Q: What are the two fixed financial costs most commonly found on the firm’s income statement in respect…

A: In finance, the term “leverage” represents use of outsiders’ funds to finance capital assets of the…

Q: How can an unlevered firm uptain financial leverage

A: Unlevered firm is a firm with no debt in its capital structure. It does not have any financial…

Q: What are the two different formulas used to Calculate the degree of financial leverage (DFL)?

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Define each of the following terms:b. Operating leverage; financial leverage; break-even point

A: Answer: Operating leverage: This is the degree to which the company employs the fixed costs. The…

Q: Differentiate operating leverage from financial leverage.

A: Leverage is the amount of fixed costs a company has in its income statements. Greater leverage leads…

Q: Why is financial leverage is attractive

A: Introduction : In simple words, financial leverage refers to the process in which a company buys…

Q: Explain why financial analyst are interested in liquidity and solvent ratios

A: Liquidity Ratios help in determining the ability to pay its short-term obligations, whereas Solvency…

Q: b. Explain how do analysts use ratios to analyse a firm’s leverage?

A: Leverage: It is a term which refers to the usage of debt financing through borrowing funds to…

Q: What is Basic Calculations of Financial Leverage?  Please provide example.

A: Financial Leverage:It represents that how a company uses its debt to acquire assets. It also shows…

Q: Explain this statement: Using financial leverage has both good and bad effects.

A: financial leverage is the process of borrowing capital to make an investment, with the assurance…

Q: How is leverage expressed in DuPont Ratio System? a) Total Debt / Equity b) Total Debt / Total…

A: Dupont ratio system is used to analysis the financial statements and assess its financial condition.…

Q: Define the term s financial leverage?

A: Financial leverage means buying the asset by taking the debt. The company always uses leverage…

Q: Explain the parameters or situations used to determine if the operating and financial leverages are…

A: Operating leverage is based on the cost structure of the company. It is the extent of fixed and…

Q: what are liquidity ratios, leverage ratios, profitability ratios, and market measure rat

A: Ratios are calculated in order to identify the ability of the company from various parameters.

Q: performance

A: The term financial leverage refers to the amount of debt that is used by the company in order to…

Q: Financial leverage is the degree to which a firm or individual utilizes             . A.…

A: Financial Leverage: Financial leverage is a term used to define the capital structure of a company…

Q: What is the Degree of Operating Leverage (DOL), Degree of Financial Leverage (DFL) and Degree of…

A: Leverage means the use of certain fixed costs, where the firm levers up its profitability. It…

Q: What is the difference between financial leverage and operating leverage

A: Operating leverage: Operating leverage is a sign of how a corporation's costs are organized and is…

Q: Explain how do analysts use ratios to analyse a firm’s leverage?

A: Ratios plays an important role in determining and analysing financial position of the company.…

Q: Define financial leverage. Explain how financial leverage works to the benefit of the common…

A: Financial leverage is the borrowing of debt to finance assets of the corporation. The financial…

Q: how value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to…

A: Financial statements: Financial statements are the summary of transactions presented in the form of…

Q: Explain Financial Leverage?

A: Companies going for purchase of assets have three options for financing. They are equity, debt &…

Q: What is positive and negative financial leverage? How are returns or losses magnified as the degree…

A: Leverage is a growth strategy in which companies or individuals use borrowed funds for increasing…

Q: What factors contribute to the risk of overusing financial leverage?

A: Financial leverage is the use of debt in the capital structure to acquire additional assets. Use of…

Q: What is financial leverage?

A: Capital Structure:   It refers to the combination of debt and equity that constitutes the finances…

Q: what are the benefits/risks of financial leverage?

A: Financial leverage is a condition wherein a company raises funds through the issue of additional…

Q: Why is EBIT generally considered independent of financial leverage? Why might EBITactually be…

A: EBIT or Earnings Before Interest and Taxes measures all profits before removing interest and tax…

Q: Define Financial leverage.

A: Leverage: Leverage measures overlook the mixture of debt and equity which is required for analyzing…

Q: income tax bracket. Compute the following for the firm: a. Degree of operating leverage b. Degree of…

A: Operating Leverage: It refers to the company's ability to apply fixed costs for generating more…

Q: a) Define financial leverage. b) What is the effect on earnings? c) When is the use of financial…

A: a) When the company using the debt capital in order to increases the assets and conducting the…