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difference between operating leverage and financial leverage


Discuss difference between operating leverage and financial leverage within the Financial Management ( FM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; wat are the factors of difference between operating leverage and financial leverage. how can both the leverage can be measured? ...

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Dimpy Handa
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difference between operating leverage and financial leverage - November 1st, 2010

wat are the factors of difference between operating leverage and financial leverage. how can both the leverage can be measured?
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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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Re: leverages - November 3rd, 2010

Hope this wil make u understand the operating and financial leverage more clearly
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Rishabh Dugar
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Re: difference between operating leverage and financial leverage - May 14th, 2011

but our teacher has taught us some thing very different.

DOL : Contribution/EBIT

DFL : EBIT/EBT

is this also correct?
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Business Education
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Re: difference between operating leverage and financial leverage - June 27th, 2015

Difference can be easily identified by their definition.So, here is the definition of operating leverage and financial leverage.

Meaning and Definition of operating leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income. It is a measure of leverage, and of how risky, or volatile, a company's operating income is.

Meaning and Definition of financial leverage

Financial leverage refers to the use of debt to acquire additional assets. Financial leverage is also known as trading on equity. Below are two examples to illustrate the use of financial leverage, or simply leverage. Mary uses $400,000 of her cash to purchase 40 acres of land with a total cost of $400,000.
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Re: difference between operating leverage and financial leverage - April 21st, 2016

Quote:
Originally Posted by dimpy.handa View Post
wat are the factors of difference between operating leverage and financial leverage. how can both the leverage can be measured?
Hello friend,

Here I am sharing Study on Financial and Operating Leverage, so please download and check it.
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