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. Financial leverage involves the use of debt, impacting interest expenses and thus EPS. Operating leverage involves fixed costs, affecting EBIT but not directly EPS.

Provided a Firm Does Not Use an Extreme Amount of Debt