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Combined Leverage
15-15 Combined Leverage
Combined Leverage lets you calculate the combined effects of operation and financial
leverages.
Combined Leverage Fields
The following fields appear on the Combined Leverage calculation page.
Field Description
SAL Amount obtained from sales
VC Variable cost for this level of production
FC Fixed costs
INT Interest to be paid to bondholders
DCL Degree of combined leverage
I
Example
Calculate the Combined Leverage ([DCL]) for a company with variable costs ([VC]) of
$6,000, fixed costs ([FC]) of $2,000, and sales ([SAL]) of $12,000, of which $1,000 is paid to
bondholders ([INT]).
• You can also calculate variable costs ([VC]), fixed costs ([FC]), sales ([SAL]), or the amount
or paid to bondholders ([INT]) by inputting the other four values and tapping the button for
the result you want.
Calculation Formulas
SAL – VC – FC – ITR
DCL
=
SAL – VC