Business Studies, asked by pratham501, 1 year ago

what is the relationship between financial leverage and financial performance?​

Answers

Answered by vijaytheboss
1

Answer:

The Operating Leverage measures the effect of fixed operating costs, whereas Financial Leverage measures the effect of interest expenses. Operating Leverage influences Sales and EBIT but Financial Leverage affects EBIT and EPS. Operating Leverage arises due to the company's cost structure.

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