Degree Of Combined Leverage
Degree of Combined Leverage
The percentage change in a firm’s earning per share (EPS) results from one percent change in sales. This is also equal to the firm’s degree of operating leverage (DOL) times its degree of financial leverage (DFL) at a particular level of sales.
Degree of combined leverage = Percentage change in EPS / Percentage change in sales
The percentage change in a firm’s earning per share (EPS) results from one percent change in sales. This is also equal to the firm’s degree of operating leverage (DOL) times its degree of financial leverage (DFL) at a particular level of sales.
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Degree of combined leverage = Percentage change in EPS / Percentage change in sales
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