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Leverages
'Leverages' are of prime importance in the analysis of a companies' risk. They give a good picture of the business, financial and the overall risk of a company's operations. Following three leverages are the most important in this regard:
Operating Leverage (OL) = Contribution / EBIT
Financial Leverage (FL) = EBIT / PBT
Combined Leverage = OL * FL = Contribution / PBT
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