The Degree of Financial Leverage Gives an Indication of How

question 28

True/False

The degree of financial leverage gives an indication of how a change in EBIT will affect EPS.

---

Definitions:

Accounting Role

The function or position that involves recording, summarizing, and reporting financial transactions to ensure accurate financial management and compliance with accounting standards.

Economic Condition

The state of a country or region's economy at a given time, including factors like growth rate, inflation, and unemployment.

Revenue Excess

Typically refers to the situation where the revenues exceed the expenses within a given period, leading to a positive income.

Expenses Incurred

Costs that have been realized in the course of business operations, regardless of payment status.