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14 financial leverage, Calculation formulas -13-1, Financial – Casio CLASSPAD 330 3.04 User Manual

Page 873: Leverage, 14 financial, Financial leverage fields, Calculation formulas

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Financial Leverage

15-14 Financial Leverage

Financial Leverage lets you calculate the degree of change in net earnings arising from a
change in interest paid.

Financial Leverage Fields

The following fields appear on the Financial Leverage calculation page.

Field

Description

EBIT

Earnings before interest and taxes

INT

Interest to be paid to bondholders

DFL

Degree of financial leverage

I Example

Calculate the financial leverage ([DFL]) for a company that earns $400,000 before interest
and taxes ([EBIT]), $80,000 of which is paid to bondholders ([INT]).

• You can also calculate earnings before interest and taxes ([EBIT]) or interest to be paid to

bondholders ([INT]) by inputting the other two values and tapping the button for the result
you want.

Calculation Formulas

EBIT

ITR

DFL

=

EBIT