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Accounting Ratios — Accountancy STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceAccountancyAccounting Ratios1 Mark
Question
Combined Leverage is obtained from OL and FL by their _____________.
  1. Addition
  2. Subtraction
  3. Multiplication
  4. Any of these
✓

Answer

  1. Multiplication
Explanation:

A degree of combined leverage is the combination of financial leverage and operating leverage. It provides the combined effect of degree of operating leverage and financial leverage. Combined leverage provide the % change in EPS against the % change in sales.

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