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What Is Comprehensive Leverage?

2011/1/29 9:58:00 32

Comprehensive Leverage Accounting


What is comprehensive leverage?


Operating leverage and financial leverage are always combined.

Develop

Acting.

This linkage is called comprehensive leverage.

comprehensive

Leverage is the size of the leverage.

measure


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 the impact of changes in sales volume on earnings per share.

The formula is expressed as follows:


Comprehensive leverage ratio = common stock EPS rate of change / 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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