what if financial leverage ?
1 Answer(s)
Neeraj
It is nothing but relation between change in company's Earning per share and it's Operating Profit.
It shows how sensitive EPS is , with respect to Operating Profits.
if DoFL(Degree of Financial Leverage) is 2 , means Earning per share (or Net Income) if Total Shares are constant) will increase/decrease two times for same increase/decrease in operating profit.
Apr 11 2014 04:44 PM
It shows how sensitive EPS is , with respect to Operating Profits.
if DoFL(Degree of Financial Leverage) is 2 , means Earning per share (or Net Income) if Total Shares are constant) will increase/decrease two times for same increase/decrease in operating profit.