leverage

What does leverage represent in financial analysis?

• Influence of one non-financial variable over unrelated financial variable

• Influence of one financial variable over unrelated financial variable

• Influence of one non-financial variable over some other related financial variable

• Influence of one financial variable over some other related financial variable

What does business risk refer to?

• Risk associated with the firm’s human resources

• Risk associated with the firm’s operations

• Risk associated with the firm’s marketing

• Risk associated with the firm’s financing

What is the level of sale at which operating profit is zero?

• Margin of safety

• Financial Break-even point

• Operating Break-even point

• Combined Leverage

What is the potential use of fixed finance costs to magnify the effect of changes in the earnings before interest and taxes on the earning per share of the firm?

• Financial Leverage

• Operating Leverage

• Combined Leverage

• Business Risk

What is the percentage change in earning per share, if sales increased by 5%?

• 25%

• 23.625%

• 10%

• 44.44%

What is the degree of operating leverage (DOL) at the current sales level?

• 1.27

• 1.38

• 1.75

• 1.50

If total assets remain at the same level, but sales increase by 20%, what will be the percentage change in taxable income?

• 14%

• 18.75%

• 26.25%

• 20%

Calculate the financial leverage for Company A.

• 1.75

• 1.38

• 1.56

• 1.50

What is the Earnings per Share (EPS) at the new sales level for Company B if sales decrease by 20%?

• ₹7

• ₹67,600

• ₹1.25

• ₹12.6

Calculate the percentage change in EBIT if sales increases by 10% for the company SK Ltd.

• 18.75%

• 20%

• 26.25%

• 14%