Question

Degree of financial leverage by ebit and eps formula

Answer 1

The degree of financial leverage (DFL) is a ratio used in corporate finance to measure the sensitivity of earnings per share (EPS) to the fluctuation in theoperating income (also called earnings before interest and taxes or EBIT). The effect of financial leverage emerges if a company uses debt financing.

Answer 2

Answer:

degree of financial leverage= percentage change in eps  

                                                  percentage change in ebit

Explanation: