Provided a firm does not use an extreme amount of debt, financial leverage typically affects both EPS and EBIT, while operating leverage only affects EBIT.

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Financial leverage affects both EPS and EBIT, while operating leverage affects only EBIT. Operating leverage involves fixed costs in operations, impacting EBIT, whereas financial leverage involves interest from debt, impacting both EBIT and EPS.

Provided a Firm Does Not Use an Extreme Amount of Debt