Degree of Financial Leverage
Degree of financial leverage may be defined as the percentage change in taxable profit as a result of percentage change in earning before interest and tax (EBIT).
This can be calculated by the following formula
DFL= Percentage change in taxable Income / Percentage change in EBIT
Degree of financial leverage may be defined as the percentage change in taxable profit as a result of percentage change in earning before interest and tax (EBIT).
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]
This can be calculated by the following formula
DFL= Percentage change in taxable Income / Percentage change in EBIT
Degree Of Financial Leverage
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