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Financial Terms: Comprehensive Leverage

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Comprehensive Financial Leverage


What is comprehensive leverage?


Operating leverage and financial leverage are always combined to play a role.

This linkage is called comprehensive leverage.

comprehensive

Leverage is measured by a comprehensive leverage coefficient.


Comprehensive leverage coefficient (DTL) = net profit change rate / main business revenue change ratio = operating leverage coefficient * financial leverage coefficient


Application of comprehensive leverage


Comprehensive leverage can be used to measure changes in sales volume to earnings per share.

Influence

Degree.

The formula is expressed as follows:


Comprehensive leverage ratio = common stock EPS change rate / sales turnover rate = base period marginal contribution / (base interest pre tax profit).

debt

Interest - preferred stock dividend /1- income tax rate)

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