Formula calculating Financial Leverage is _____________.EBIT div ContributionEBIT div EBTEBIT div SalesEBIT div Variable Cost (2024)

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A

EBIT ÷ EBT

B

EBIT ÷ Contribution

C

EBIT ÷ Sales

D

EBIT ÷ Variable Cost

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Solution

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Financial leverage depicts the amount of the debt used to acquire additional assets. It is the proportion of debt present in the total Capital Structure. The formula for Financial leverage is EBIT/ EBT.

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Formula calculating Financial Leverage is _____________.EBIT div ContributionEBIT div EBTEBIT div SalesEBIT div Variable Cost (2024)

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