Corporate Finance #4 Leverage & Break-Even Analysis
Unleash Financial Potential: Master Leverage and Break-Even Analysis for Growth and ProfitabilityWhat you'll learn
- Define the concept of leverage and its significance in corporate finance decision-making.
- Analyze the different types of leverage, including operating leverage, financial leverage, and combined leverage, and their impact on business growth.
- Apply leverage ratios and formulas to assess the optimal level of leverage for a business.
- Evaluate the benefits and risks associated with leverage and make informed decisions based on leverage analysis.
- Understand the concept of break-even analysis and its importance in decision-making.
- Differentiate between fixed costs and variable costs and classify costs accordingly for break-even analysis.
- Calculate the break-even point and cash break-even point using relevant formulas and techniques.
- Analyze and interpret the results of break-even analysis to determine the financial viability of a business.
- Apply nonlinear break-even analysis methods to assess the impact of changing variables on break-even points.
- Utilize Excel worksheets and financial modeling techniques to conduct leverage and break-even analysis efficiently.
