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Degree of total leverage (DTL)
The degree of total leverage, which is a way to measure the total leverage of the firm, refers to the relationship between sales revenue and EPS. It (financial and operating leverage) is a measure of...
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Leverage
In finance, leverage (which is also called gearing or levering) refers to the use of debt rather than equity as a source of capital to finance investments and reinvestments. The more debt the business...
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Operating leverage
Operating leverage is the relationship between sales and revenue (Price*Quantity of units sold) and operating profit (which is also called EBIT (earnings before interest and taxes)). It is a measure of...
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Financial leverage
Financial leverage is the relationship between operating profit and EPS (earnings per share). In short, it measures the level of debt. It is a measure of how the potential use of fixed financial costs...
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