Explain the concept of financial leverage.
Discuss the alternative measures of financial leverage.
Understand the risk and return implications of financial leverage.
Analyse the combined effect of financial and operating leverage.
Highlight the difference between operating risk and financial risk.
Definition of leverage, Types of Leverages, meaning of operating leverage, financial leverage, combined leverage, Formulas for Operating and financial leverage, variable cost, fixed cost, EBIT, Contribution, EPS-EBIT Analysis, Income statement, practical problems on leverages, etc.
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
Explain the concept of financial leverage.
Discuss the alternative measures of financial leverage.
Understand the risk and return implications of financial leverage.
Analyse the combined effect of financial and operating leverage.
Highlight the difference between operating risk and financial risk.
Definition of leverage, Types of Leverages, meaning of operating leverage, financial leverage, combined leverage, Formulas for Operating and financial leverage, variable cost, fixed cost, EBIT, Contribution, EPS-EBIT Analysis, Income statement, practical problems on leverages, etc.
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
Risk and Return: An Overview of Capital Market Theory PANKAJ PANDEY
Discuss the concepts of average and expected rates of return.
Define and measure risk for individual assets.
Show the steps in the calculation of standard deviation and variance of returns.
Explain the concept of normal distribution and the importance of standard deviation.
Compute historical average return of securities and market premium.
Determine the relationship between risk and return.
Highlight the difference between relevant and irrelevant risks.
In general, leverage refers to accomplish certain things which are otherwise not possible
i.e. lifting of heavy objects with the help of lever. This concept of leverage is valid in business also.
In finance, the term ‘leverage’ is used to describe the firm’s ability to use fixed cost asset or funds to increase the return to its owners; i.e. equity share holders. In other words, the fixed cost funds i.e. debentures & preference share capital act as the fulcrum, which assist the lever i.e. the firm to lift i.e. to increase the earnings of its owner i.e. the equity shareholders.
Leverage is also the influence which an independent variable has over a dependent/related variable i.e. rainfall over production. In financial context, sales& fixed cost over profit.
Risk and Return: An Overview of Capital Market Theory PANKAJ PANDEY
Discuss the concepts of average and expected rates of return.
Define and measure risk for individual assets.
Show the steps in the calculation of standard deviation and variance of returns.
Explain the concept of normal distribution and the importance of standard deviation.
Compute historical average return of securities and market premium.
Determine the relationship between risk and return.
Highlight the difference between relevant and irrelevant risks.
In general, leverage refers to accomplish certain things which are otherwise not possible
i.e. lifting of heavy objects with the help of lever. This concept of leverage is valid in business also.
In finance, the term ‘leverage’ is used to describe the firm’s ability to use fixed cost asset or funds to increase the return to its owners; i.e. equity share holders. In other words, the fixed cost funds i.e. debentures & preference share capital act as the fulcrum, which assist the lever i.e. the firm to lift i.e. to increase the earnings of its owner i.e. the equity shareholders.
Leverage is also the influence which an independent variable has over a dependent/related variable i.e. rainfall over production. In financial context, sales& fixed cost over profit.
Leverages one of the most difficult to understand and interpret in financial management.. Here's a short explanation with calculation of financial and operating leverages..
COVID-19 is a disease caused by a new strain of coronavirus. 'CO' stands for corona, 'VI' for virus, and 'D' for disease. Formerly, this disease was referred to as '2019 novel corona virus' or '2019-nCoV.
Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.
The time value of money (TVM) is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that provided money can earn interest, any amount of money is worth more the sooner it is received
Organization development (OD) is the study of successful organizational change and performance. OD emerged from human relations studies in the 1930s, during which psychologists realized that organizational structures and processes influence worker behavior and motivation.
Organization development is the study of successful organizational change and performance. OD emerged from human relations studies in the 1930s, during which psychologists realized that organizational structures and processes influence worker behavior and motivation.
Oragnization development OD (INTRODUCTION)shagun jain
Organization development is the study of successful organizational change and performance. OD emerged from human relations studies in the 1930s, during which psychologists realized that organizational structures and processes influence worker behavior and motivation.
In economics and accounting, the cost of capital is the cost of a company's funds, or, from an investor's point of view "the required rate of return on a portfolio company's existing securities". It is used to evaluate new projects of a company.
Capital Budgeting is the formal process of investments or expenditure that is huge in amount. It involves the company's major decision where to invest the current fund in the development of the organization such as for addition, disposition, modification, or replacement of fixed assets.
The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
Presentation of largest FMCG in the world.The Coca-Cola Company is an American multinational beverage corporation headquartered in Atlanta, Georgia. The Coca-Cola Company has interests in the manufacturing, retailing and marketing of nonalcoholic beverage concentrates and syrups.
Globalization refers to the changes in the world where we are moving away from self-contained countries and toward a more integrated world. Globalization of business is the change in a business from a company associated with a single country to one that operates in multiple countries
Business ethics refers to implementing appropriate business policies and practices with regard to arguably controversial subjects. Some issues that come up in a discussion of ethics include corporate governance, insider trading, bribery, discrimination, social responsibility, and fiduciary responsibilities.
Corporate social responsibility (CSR) is a type of international private business self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
Globalization refers to the changes in the world where we are moving away from self-contained countries and toward a more integrated world. Globalization of business is the change in a business from a company associated with a single country to one that operates in multiple countries.
The law of equi-marginal utility states that the consumer will distribute his money income between the goods in such a way that the utility derived from the last rupee spend on each good is equal. In other words, consumer is in equilibrium position when marginal utility of money expenditure on each goods is the same.
The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices
Microfinance, also called microcredit, is a type of banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial service.
Pani Panchayat is the name first given to a movement by Mr. Vilasrao Salunke for motivating farmers of Naigaon village of the drought-prone Purandhar taluka of Maharashtra in 1974. The government's inability to deal with the drought situation prompted him to take a 40 acre land on lease from the village temple trust and develop a recharge pond in the recharge area of the village, a dug well in the discharge zone and a lift irrigation system.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
2. Chapter Objectives
Explain the concept of financial leverage.
Discuss the alternative measures of financial
leverage.
Understand the risk and return implications
of financial leverage.
Analyse the combined effect of financial and
operating leverage.
Highlight the difference between operating
risk and financial risk.
3. Questions while Making the
Financing Decision
How should the investment project be financed?
Does the way in which the investment projects are
financed matter?
How does financing affect the shareholders’ risk,
return and value?
Does there exist an optimum financing mix in terms
of the maximum value to the firm’s shareholders?
Can the optimum financing mix be determined in
practice for a company?
What factors in practice should a company consider
in designing its financing policy?
4. Capital Structure Defined
The term capital structure is used to represent
the proportionate relationship between debt
and equity.
The various means of financing represent the
financial structure of an enterprise. The left-
hand side of the balance sheet (liabilities plus
equity) represents the financial structure of a
company. Traditionally, short-term borrowings
are excluded from the list of methods of
financing the firm’s capital expenditure.
5. Leverage
The term leverage refers to means of
accomplishing power for gaining an advantage.
It represents the impact of one financial variable
over some other related financial variable.
Leverage refers to the ability of a firm in
employing long term funds having fixed costs ,
to enhance the returns to the owners.
6. Operating Leverage
The tendency of the operating profits of the
company to behave disproportionately with the
sales is referred as operating leverage. Thus it
refers to the sensitivity of operating profit
before interest and tax to changes in quantity
produced and sold.
Operating Leverage = Contribution / EBIT
Thus a company with high fixed costs to total cost
will have high operating leverage.
7. Operating Leverage
Operating leverage
affects a firm’s
operating profit (EBIT).
The degree of
operating leverage
(DOL) is defined as the
percentage change in
the earnings before
interest and taxes
relative to a given
percentage change in
sales.
% Change in EBIT
DOL
% Change in Sales
EBIT/EBIT
DOL
Sales/Sales
8. Meaning of Financial
Leverage
The use of the fixed-charges sources of funds, such
as debt and preference capital along with the
owners’ equity in the capital structure, is described
as financial leverage or gearing or trading on
equity.
The financial leverage employed by a company is
intended to earn more return on the fixed-charge
funds than their costs. The surplus (or deficit) will
increase (or decrease) the return on the owners’
equity. The rate of return on the owners’ equity is
levered above or below the rate of return on total
assets.
9. Financial Leverage
This ratio indicates the effects on earnings by rise of
fixed cost funds. It refers to the use of debt in the
capital structure. Financial leverage arises when a firm
deploys debt funds with fixed charge. The ratio is
expressed as follows:-
Financial Leverage = EBIT /EBT
The higher the ratio , the lower is the cushion for
paying interest on borrowings. A low ratio indicates a
low interest outflow and consequently lower
borrowings. A high ratio is risky and constitutes strains
on profits.
10. Degree of Financial Leverage
The financial leverage highlights the proportion
of fixed return securities in the capital structure
which are used to increase the ultimate return to
the equity shareholders. The degree of financial
leverage is an attribute of the firm’s exposure to
financial risk. The degree of financial leverage is
expressed as follows:-
Degree of Financial Leverage = % Change In
EPS/ % Change in EBIT
11. Measures of Financial Leverage
Debt ratio
Debt–equity ratio
Interest coverage
The first two measures of financial leverage can be
expressed either in terms of book values or market
values. These two measures are also known as
measures of capital gearing.
The third measure of financial leverage, commonly
known as coverage ratio. The reciprocal of interest
coverage is a measure of the firm’s income
gearing.
12. Effect of Leverage on ROE and
EPS
Favourable ROI > i
Unfavourable ROI < i
Neutral ROI = i
13. Combining Financial and
Operating Leverages
Operating leverage affects a firm’s
operating profit (EBIT), while financial
leverage affects profit after tax or the
earnings per share.
The degrees of operating and financial
leverages is combined to see the effect of
total leverage on EPS associated with a
given change in sales.
14. Combining Financial and
Operating Leverages
The degree of combined leverage (DCL) is
given by the following equation:
CL = OL *FL
Cont/EBIT* EBIT/EBT= Cont/EBT
% Change in EBIT % Change in EPS % Change in EPS
% Change in Sales % Change in EBIT % Change in Sales
15. Financial Leverage and the
Shareholders’ Risk
The variability of EBIT and EPS distinguish
between two types of risk—operating risk and
financial risk.
Operating risk can be defined as the variability of
EBIT (or return on total assets). The
environment—internal and external—in which a
firm operates determines the variability of EBIT
The variability of EBIT has two components:
variability of sales
variability of expenses
The variability of EPS caused by the use of financial
leverage is called financial risk.