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Re: leverages
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Paramjeet_1988 is an unknown quantity at this point
Student of Master of Science at IIT Kharagpur
Kharagpur, West Bengal
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Join Date: Oct 2010
Location: Kharagpur, West Bengal
Re: leverages - November 1st, 2010

Operating leverage measures the difference in the income if the amount of output or sale is changed by one unit and financial leverage is the amount of change in returns if there is a change in the funds that had been borrowed to form the assets. Operating leverage can be measured by the change in earning before interest and tax while degree of OL can be measured by the change in earning per share divided by the percentage change in the earning before interest and tax.
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