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Degree of Combined Leverage Formula

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Degree of Combined Leverage represents a company's total risk related to operating leverage, financial leverage, and the net effect on the earnings per share. Check FAQs

DCL = DOL \cdot DFL

DCL - Degree of Combined Leverage?DOL - Degree of Operating Leverage?DFL - Degree of Financial Leverage?

Degree of Combined Leverage Example

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Here is how the Degree of Combined Leverage equation looks like with Values.

Here is how the Degree of Combined Leverage equation looks like with Units.

Here is how the Degree of Combined Leverage equation looks like.

1.78 = 0.89 \cdot 2

1.78 = 0.89 \cdot 2

1.78 = 0.89 \cdot 2

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Degree of Combined Leverage Solution

Follow our step by step solution on how to calculate Degree of Combined Leverage?

FIRST Step Consider the formula

DCL = DOL \cdot DFL

Next Step Substitute values of Variables

∴

DCL = 0.89 \cdot 2

Next Step Prepare to Evaluate

∴

DCL = 0.89 \cdot 2

LAST Step Evaluate

∴

DCL = 1.78

Degree of Combined Leverage Formula Elements

Variables

Degree of Combined Leverage

Degree of Combined Leverage represents a company's total risk related to operating leverage, financial leverage, and the net effect on the earnings per share.

Symbol: DCL

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Degree of Combined Leverage

Degree of Operating Leverage

The Degree of Operating Leverage is a leverage ratio that summarizes the effect a particular amount of operating leverage has on a company's earnings before interest and taxes over a period of time.

Symbol: DOL

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Degree of Operating Leverage

Degree of Financial Leverage

The Degree of Financial Leverage is a metric that measures the sensitivity of a company’s operating income due to changes in its capital structure.

Symbol: DFL

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Degree of Financial Leverage

Other formulas in Leverage Ratios category

Go Degree of Operating Leverage

DOL = \frac{%ΔEBIT}{%ΔSales}

Go Degree of Financial Leverage

DFL = \frac{EBIT}{EBIT - I}

Go Financial Leverage

FL = \frac{TD}{TSE}

How to Evaluate Degree of Combined Leverage?

Degree of Combined Leverage evaluator uses Degree of Combined Leverage = Degree of Operating Leverage*Degree of Financial Leverage to evaluate the Degree of Combined Leverage, The Degree of Combined Leverage formula is defined as a leverage which represents a company's total risk related to operating leverage, financial leverage, and the net effect on the earnings per share. Degree of Combined Leverage is denoted by DCL symbol.

How to evaluate Degree of Combined Leverage using this online evaluator? To use this online evaluator for Degree of Combined Leverage, enter Degree of Operating Leverage (DOL) & Degree of Financial Leverage (DFL) and hit the calculate button.

FAQs on Degree of Combined Leverage

What is the formula to find Degree of Combined Leverage?

The formula of Degree of Combined Leverage is expressed as Degree of Combined Leverage = Degree of Operating Leverage*Degree of Financial Leverage. Here is an example- 1.78 = 0.89*2.

How to calculate Degree of Combined Leverage?

With Degree of Operating Leverage (DOL) & Degree of Financial Leverage (DFL) we can find Degree of Combined Leverage using the formula - Degree of Combined Leverage = Degree of Operating Leverage*Degree of Financial Leverage.

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Degree of Combined Leverage Formula

Degree of Combined Leverage Example

Degree of Combined Leverage Solution

Degree of Combined Leverage Formula Elements

Other formulas in Leverage Ratios category

How to Evaluate Degree of Combined Leverage?

FAQs on Degree of Combined Leverage

Variable Name