PPT: Financing Decisions- Leverages | Financial Management & Strategic Management for CA Intermediate PDF Download

 Page 1


Financial Management
Page 2


Financial Management
Content :-
? Meaning of Leverage
? Types of Leverage
? Operating Leverage
? Financial Leverage
? Difference between Operating & Financial Leverage
? Combined Leverage
? Illustrations 
? Exercise
Page 3


Financial Management
Content :-
? Meaning of Leverage
? Types of Leverage
? Operating Leverage
? Financial Leverage
? Difference between Operating & Financial Leverage
? Combined Leverage
? Illustrations 
? Exercise
Meaning of Leverage
? Leverage means the employment of assets or funds for which the 
firm pays a fixed cost or fixed return.
? The concept that is used to study the effects of various mix of 
debt and equity on the shareholder’s return and risk in the capital 
structure of a firm is called leverage.
Page 4


Financial Management
Content :-
? Meaning of Leverage
? Types of Leverage
? Operating Leverage
? Financial Leverage
? Difference between Operating & Financial Leverage
? Combined Leverage
? Illustrations 
? Exercise
Meaning of Leverage
? Leverage means the employment of assets or funds for which the 
firm pays a fixed cost or fixed return.
? The concept that is used to study the effects of various mix of 
debt and equity on the shareholder’s return and risk in the capital 
structure of a firm is called leverage.
Types of Leverage
Operating 
Leverage 
Financial 
Leverage
Combined 
Leverage
Page 5


Financial Management
Content :-
? Meaning of Leverage
? Types of Leverage
? Operating Leverage
? Financial Leverage
? Difference between Operating & Financial Leverage
? Combined Leverage
? Illustrations 
? Exercise
Meaning of Leverage
? Leverage means the employment of assets or funds for which the 
firm pays a fixed cost or fixed return.
? The concept that is used to study the effects of various mix of 
debt and equity on the shareholder’s return and risk in the capital 
structure of a firm is called leverage.
Types of Leverage
Operating 
Leverage 
Financial 
Leverage
Combined 
Leverage