Measures of Leverage

This course is a part of CFA Level I study material.

Leverage refers to the use of fixed costs in a company's cost structure. In this reading we will learn about the various measures of leverage, namely, operating leverage and financial leverage. We will also learn about how operating leverage and financial leverage impact the operating earnings and income of the company. Finally we will calculate the breakeven quantity of sales and determine the company's net income at various sales levels.


Study Notes for CFA Level I - Measures of Leverage