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About This Course

Who this course is for:

  • Students
  • Business professionals

What you’ll learn:

  • Be able to explain the concept of leverage and why it is important
  • Be able to use break-even analysis for decision making
  • Explain the concepts of degree of operating leverage, financial leverage, and combined leverage
  • Calculate the break-even point
  • Calculate the cash break-even point
  • Use nonlinear break-even analysis

Requirements:

  • A general understanding of financial concepts

In this course, we will cover the concepts of leverage and break-even analysis from a corporate finance perspective.

Leverage is a critical component of decision making in corporate finance and is an area of debate as to the optimal amount of leverage. Finding the best level of leverage may allow a business to grow much faster.

We will discuss the concepts of operating leverage, financial leverage, and combined leverage and include practical practice problems related to these critical concepts.

Break-even analysis is a fundamental tool in decision making. Learners will understand the concept of break-even analysis, including the tool of breaking costs up by their behavior, labeling them fixed costs and variable costs. Labeling costs by category of fixed and variable can seem unnatural at first, because we often label costs by function, what the cost is designed to do, like operating expenses and cost of goods sold. Labeling cost by behavior helps us see how the cost changes with relation to increases in production level, a useful concept for projecting into the future.

The course will show how to calculate the break-even point and the cash break-even point. We will also discuss the concept of nonlinear break-even analysis.

This course will include many practice problems, often including downloadable Excel worksheets. Each Excel worksheet will have at least two tabs, one with the answer, one with a preformatted worksheet that learners can populate along with step-by-step instructional videos.

Our Promise to You
By the end of this course, you will have learned leverage and break-even analysis from a certified public accountant.

30 Day Money Back Guarantee. If you are unsatisfied for any reason, simply contact us and we’ll give you a full refund. No questions asked.

Get started today and learn more about leverage and break-even analysis.

Course Curriculum

11h 44m

Section 1 - Leverage And Break-Even Analysis
Leverage Overview 00:00:00
Break Even Analysis 00:00:00
Degree Of Operating Leverage 00:00:00
Financial Leverage 00:00:00
Combined Leverage 00:00:00
Section 2 - Practice Problems - Leverage And Break-Even Analysis
Break Even Analysis 00:00:00
Break Even Point And Fixed And Variable Cost 00:00:00
Break Even Analysis Projection Plan 00:00:00
Cash Break Even Point 00:00:00
Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 1 00:00:00
Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 2 00:00:00
Second Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 1 00:00:00
Second Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 2 00:00:00
Degree Of Leverage Problem 1 00:00:00
Degree Of Leverage Problem 2 00:00:00
Nonlinear Breakeven Analysis 00:00:00
Degree Of Operating Leverage Alternative Formula 00:00:00
Price Earnings Ratio Comparison For Companies With Different Leverage 00:00:00
Leverage Ratios And Projected Expansion Scenarios 00:00:00
Section 3 - Excel Problems - Leverage And Break-Even Analysis
Downloadable Practice Files 00:00:00
Break Even Analysis 00:00:00
Break Even Point And Fixed And Variable Cost 00:00:00
Break Even Analysis Projection Plan 00:00:00
Cash Break Even Point 00:00:00
Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 1 00:00:00
Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 2 00:00:00
Second Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 1 00:00:00
Second Degree Of Operating Leverage, Degree Of Financial Leverage, And Combined Leverage Part 2 00:00:00
Degree Of Leverage Problem 1 00:00:00
Degree Of Leverage Problem 2 00:00:00
Nonlinear Breakeven Analysis 00:00:00
Degree Of Operating Leverage Alternative Formula 00:00:00
Financial Leverage And Earnings Per Share 00:00:00
Using Price To Earnings Ratio PE Ratio To Calculate Market Price 00:00:00
Price Earnings Ratio Comparison For Companies With Different Leverage 00:00:00
Leverage Ratios And Projected Expansion Scenarios 00:00:00
Leverage Analysis Problem 1 Part 1 00:00:00
Leverage Analysis Problem 1 Part 2 00:00:00
Leverage Analysis Problem 2 Part 1 00:00:00
Leverage Analysis Problem 2 Part 2 00:00:00
Financing Plans To Increase Assets 00:00:00