Accounting

Combined leverage is the leverage that refers to high profits due to fixed costs. The combination of operating leverage and financial leverage is called total…

Financial leverage which is also known as leverage or trading on equity refers to the use of debt to acquire additional assets. It is related…

Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue. It may…

Leverage is a firm’s ability to employ new assets or funds to create better returns or to reduce costs. That’s why leverage for any company…

The degree of financial leverage is a financial ratio that measures the sensitivity in fluctuations of a company’s overall profitability to the volatility of its…

The degree of operating leverage (DOL) is a multiple that measures how much the operating income of a company will change in response to a…

The degree of operating leverage measures the effects that operating leverage has on a company’s earnings potential and indicates how earnings are affected by sales…

Features of Amalgamation Amalgamation is defined as a combination of one or more companies into a new entity. It is an arrangement where two or…

Internal reconstruction External reconstruction is one in which the company undergoing reconstruction is liquidated to take over the business of an existing company. In the…

External Reconstruction Reconstruction is a process of the company’s reorganization, concerning legal, operational, ownership, and other structures, by revaluing assets and reassessing the liabilities. External…

Concept of Reconstruction in Accounting Reconstruction is an exercise of restating assets & liabilities by a company/entity whose financial position as reflected by its balance…

Disadvantages of Holding Company A holding company is a conglomerate corporation formed for the purpose of holding a controlling interest in several companies. Such a…