The degree of financial leverage measures the sensitivity of __________ to changes in __________.
A) net sales, EBIT
B) EBIT, net sales
C) EBIT, eps
D) eps, EBIT

Question

Quizplus · Accepted Answer

The degree of financial leverage measures the sensitivity of earnings per share (eps) to changes in earnings before interest and taxes (EBIT). This metric helps in understanding how a company's EPS is affected by changes in its operating income (EBIT).

The Degree of Financial Leverage Measures the Sensitivity of __________