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What mean by combine leverage?
combine leverage
What is composite leverage?
Composite leverage equals financial leverage times operating leverage. Composite leverage is used to calculate the combined effect of operating and financial leverages. Leverage is the ratio of a company's debt to its equity.
Define leverage ratio?
Leverage Ratio is an idea of how a change in a company's output will affect their operating income. It is used to measure a company's mix of operating costs, showing how a change in the company's ideas will affect the output of their operating income.
How do you figure out the degree of financial leverage at a company?
Leverage is the amount of debt relative to shareholder capital, or equity. So a company with 3 times as much debt as equity is three times leveraged.
How does new debt effect leverage?
Leverage ratio (debt to equity ratio) is calculated by dividing a company's total debt by the company's total shareholder equity. Therefore, any new debt will raise the leverage ratio (and the risk to the bank). Example: Company has $1,000,000 in Total Assets; $400,000 in debt; $100,000 in other liabilities; and $500,000 in Equity. The company's beginning leverage ratio is 0.8 ($400,000/$500,000). Now, assume the company borrowers $250,000 to purchase additional equipment. The business would then have $1,250,000 in Total Assets; $650,000 in debt; $100,000 in other liabilities; and $500,000 Equity. The company's new leverage ratio would be 1.3 ($650,000/$500,000).
Indicate the relationship between financial leverage and financial risk?
As the financial leverage increases, the breakeven point of the company increases. The company now has to sell more of its product (or service) in order to break even. As the financial leverage increases, the risk to banks and other lenders increases because of the higher probability of bankruptcy. As the financial leverage increases, the risk to stockholders increases because greater losses may be incurred if the company goes bankrupt. As the financial leverage increases, the risk to stockholders increases because the higher leverage will cause greater volatility in earnings and greater volatility in the stock price.
Explain why operating leverage decreases as a company increases sales and shifts away from the break even point?
"Explain why operating leverage decreases as a company increases sales and shifts away from the break-even point."
What is the name of insurance company Nate from Leverage is hired at in the beginning of the episode?
IYS
Is it 2.5 percent leverage ration is good for food stuff company?
Yes
Can leverage analysis be done for a company which has not gone for public issue of shares?
nope
Is 183 seconds or to 3 minutes?
If you mean is 183 seconds = 3 minutes. Its not. 1 minute is 60 seconds so 3 times 60 is 180 not 183.
What do you mean by leverage?
basically leverage is the employment of assets or sources of finance for which firms pays fixed cost or fixed return.
