Published on January 30, 2014
LEVERAGE AND CAPITAL STRUCTURE
Leverage refers to the effects that fixed costs have on the returns that shareholders earn
Capital Structure the mix of long-term debt and equity maintained by the firm
S = Sales x = Sales volume in units p = Selling price per unit v = Unit variable cost VC = Variable operating costs FC = Fixed operating costs Break-even Analysis used to indicate the level of operations necessary to cover all costs and to evaluate the profitability associated with various levels of sales
Contribution Margin (CM) CM = S - VC Unit CM Unit CM = p - v
Example: S= P37500 x= 1,500 units p = P25 v = P10 VC = P15000 FC = P15000 Find the CM and the unit CM. Solution: CM = S – VC CM = P37500 – P15000 CM = P22500 unit CM = p – v unit CM = P25 – P10 unit CM = P15
Break-even point = Fixed costs Unit CM Break-even point = FC p-v Example: Break-even point in units = P15000/P15 Break-even point in units = 1000 units Break-Even Point The level of sales necessary to cover all fixed and variable operating costs.
Les changements sur le marché du distressed aux Etats-Unis et en Europe
Main Sections of the Report 1) Nifty Technical View 2) 4 Large Cap Trade Ide...
This presentation consits the yearly results of Kinepolis Group
A firm's capital structure is the composition or 'structure' of its liabilities. For example, a firm that has $20 billion in equity and $80 billion in debt ...
Financial leverage is the degree to which a company uses fixed-income securities such as debt and preferred equity. The more debt financing a company uses ...
Chapter 12 Leverage and Capital Structure 305 P12-9. LG 2: Degree of Operating Leverage–Graphic Intermediate (a) FC $72,000 Q 24,000 units
Financial Structure, Capital structure (Capitalization), Leverage are defined, explained with balance sheet Equities and Liabilities, illustrated with ...
A firm's capital structure can be a mixture of long-term debt, short-term debt, common equity and preferred equity. A company's proportion of short- and ...
Chapter 13. Leverage and Capital Structure Answers to Warm-Up Exercises E13-1. Breakeven analysis Answer: The operating breakeven point is the level of ...
Chap13 Leverage and Capital Structure - Free download as Powerpoint Presentation (.ppt), PDF File (.pdf), Text File (.txt) or view presentation slides online.
The larger the proportion of debt in the capital structure (leverage), the higher will be the returns to equity. This is because bondholders do not share ...
Leverage and Capital Structure Ross Chapter 16 Spring 2005 10.1 Leverage Financial Leverage Financial leverage is the use of ﬁxed ﬁnancial costs to magnify
Leverage and Capital Structure Across the Disciplines Chapter Why This Chapter Matters To You Accounting: You need to understand how to calculate and ...