Leverage in Business Finance

Operating Leverage & Financial Leverage

Udemy
platform
English
language
Finance
category
Leverage in Business Finance
8
students
2 hours
content
Mar 2021
last update
$19.99
regular price

What you will learn

Applications of Leverage in Business Finance

Difference between Operating and Financial Leverage

Preparation of Income Statement using Leverage

Concept and Calculation of Degree of Operating Leverage & Financial Leverage

Description

The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments, including options, futures, and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value. To properly evaluate these statistics, it is important to keep in mind that leverage comes in several varieties, including operating, financial, and combined leverage. Fundamental analysis uses the degree of operating leverage. One can calculate the degree of operating leverage by dividing the percentage change of a company's earnings per share (EPS) by its percentage change in its earnings before interest and taxes (EBIT) over a period. Similarly, one could calculate the degree of operating leverage by dividing a company's EBIT by EBIT less interest expense. A higher degree of operating leverage shows a higher level of volatility in a company's EPS. In this course, the students will learn:

  • Concept of Leverage

  • Concept & Calculation of Operating Leverage

  • Degree of Operating Leverage

  • Concept & Calculation of Financial Leverage

  • Degree of Financial Leverage

  • Construction of Income Statement using Leverage

Content

Introduction

Introduction

Concept of Leverage

Concept of Leverage
Concept of Operating Leverage
Concept of Financial Leverage

Mechanism & Calculation of Operating Leverage & Financial Leverage

Introduction

Degree of operating Leverage & Degree of Financial Leverage

DOL & DOFL

Income Statement in Leverage

Income Statement in Leverage
Income Statement in Leverage-II

Related Topics

3899668
udemy ID
3/8/2021
course created date
3/22/2021
course indexed date
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