Tag: operating leverage

3 TYPES OF LEVERAGE IN FINANCIAL MANAGEMENT – OPERATING, FINANCIAL AND COMBINED LEVERAGE

November 9, 2022 commerceiets No Comments

TYPES OF LEVERAGE IN FINANCIAL MANAGEMENT – OPERATING, FINANCIAL AND COMBINED LEVERAGE LEVERAGE Leverage refers to debt or to the borrowings of funds to finance the purchase of the company’s asset. It is used to measure the effect of increase or decrease of fixed cost on the earnings. Leverage may be ACCORDING TO THE JAMES…

FINANCIAL MANAGEMENT

LEVERAGE NOTES

November 8, 2022 commerceiets No Comments

Leverage notes: Operating leverage, Financial leverage, Composite or combined leverage. QUESTION: Differentiate between Financial risk and Business Risk? Answer: BUSINESS RISK: Business risk is also known as operating risk. It implies uncertainty in profits or danger of loss leading to shut down of that business. These risks may arise due to future uncertainties. Example: FINANCIAL…