Masures Of Laverage

Question 1

OPERATING Breakeven quantity of SALES

Answer 1

Fixed operating costs
——————————-
Price - variable costs / unit

Question 2

Breakeven quantity of Sales

Answer 2

Fixed operating & financial costs
————————————————
Price - variable costs / unit

Question 3

Operating leverage

Answer 3

Change in EBIT
———-
Percentage in Sales

Used to measure BUSINESS RISK
With external factors wich affect SALES

Question 4

Operating risk is related with:

Answer 4

Operational cost structure

Question 5

Formulas of Financial leverage, total leverage and operating leverage

Answer 5

DOL = (P - V ) Qntd
———-
(P-V) - F

DFL = Qntd (P-V )- F
————-
Qntd (P-V) - F -$

P = Price
V = Variable cost per unit
F = Fixed operating cost
$ = Financial Expense

Degree of Total Leverage = DFL x DOL

Question 6

Business Risk =

Answer 6

Operating risk and Sales risk

Question 7

Change in operating income

Answer 7

DOL x Change in sales