Operating and Financial

Leverage
Operating and Financial Leverage

• Operating Leverage
• Financial Leverage
• Total Leverage
• Cash-Flow Ability to Service Debt
• Other Methods of Analysis
• Combination of Methods
 Operating Leverage
Operating Leverage – Penggunaan biaya
operasional tetap oleh perusahaan.

– Bersifat jangka pendek

– Biaya operasi tetap dikeluarkan agar volume
penjualan akan menghasilkan penerimaan lebih
dari cukup untuk menutup biaya operasi tetap &
variabel
 Operating Leverage
Operating Leverage – Penggunaan biaya
operasional tetap oleh perusahaan.

– Pengaruh yang mungkin timbul

disebabkan adanya biaya operasi
tetap,yaitu perubahan dalam volume
pejualan yang menghasilkan perubahaan
laba atau rugi operasi lebih besar dari
proporsi yang ditetapkan.
Impact of Operating Leverage on Profits

(in thousands) Firm F Firm V Firm 2F

Sales $10 $11 $19.5
Operating Costs
Fixed 7 2 14
Variable 2 7 3
Operating Profit $ 1 $ 2 $ 2.5
(EBIT)
Rasio Pengaruh Operasi:
FC/total costs 0.78 0.22 0.82
FC/sales 0.70 0.18 0.72

Gambaran Tiga Perusahaan Sebelum Perubahan

Penjualan
Impact of Operating Leverage on Profits
• Now, subject each firm to a 50%
increase in sales for next year.
• Which firm do you think will be more
“sensitive” to the change in sales (i.e.,
show the largest percentage change
in operating profit, EBIT)?
[ ] Firm F; [ ] Firm V; [ ] Firm 2F.
Impact of Operating Leverage on Profits
(in thousands) Firm F Firm V Firm 2F
Sales $15 $16.5 $29.25
Operating Costs
Fixed 7 2 14
Variable 3 10.5 4.5
Operating Profit $ 5 $ 4 $10.75
(EBIT)
Percentage
Change in EBIT* 400% 100% 330%

* (EBITt - EBIT t-1) / EBIT t-1

Impact of Operating Leverage on Profits

• Firm F is the most “sensitive” firm – for it,

a 50% increase in sales leads to a
400% increase in EBIT.
• Pengaruh pengungkit operasi menunjukkan
bahwa perubahan-perubahan dalam
penjualan mengakibatkan perubahan laba
operasi (sebelum bunga dan pajak) yang
tidak proposional.
 Break-Even Analysis
Break-Even Analysis – Sebuah teknik untuk
mempelajari hubungan antara biaya tetap,
biaya variabel, volume penjualan, dan
keuntungan. Disebut juga Analisis biaya /
volume / laba (C/ V / P)
– Ketika mempelajari leverage operasi, "keuntungan"
mengacu pada keuntungan sebelum pajak (yaitu, EBIT)
yang beroperasi dan tidak termasuk bunga utang dan
pembayaran dividen.
 Break-Even Chart
Total Revenues

Profits
REVENUES AND COSTS

250
($ thousands)

Total Costs
175

100 Fixed Costs

Losses
Variable Costs
50

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

QUANTITY PRODUCED AND SOLD
 Break-Even (Quantity) Point

Break-Even Point – Volume penjualan yang diperlukan

sehingga total pendapatan dan jumlah biaya yang sama; mungkin
dalam unit atau dalam nilai rupiah penjualan.

How to find the quantity break-even point:

EBIT = P(Q) – V(Q) – FC

EBIT = Q(P – V) – FC
P = Price per unit V = Variable costs per unit
FC = Fixed costs Q = Quantity (units)
produced and sold
 Break-Even (Quantity) Point
Breakeven occurs when EBIT = 0
Q (P – V) – FC = EBIT
QBE (P – V) – FC =0
QBE (P – V) = FC
QBE = FC / (P – V)

a.k.a. Unit Contribution Margin

 Break-Even (Sales) Point
How to find the sales break-even point:
SBE = FC + (VCBE)

SBE = FC + (QBE )(V)

or
SBE* = FC / [1 – (VC / S) ]

* SBE = penerimaan penjualan impas

Break-Even Point Example

Basket Wonders (BW) wants to

determine both the quantity and sales
break-even points when:
• Fixed costs are $100,000
• Baskets are sold for $43.75 each
• Variable costs are $18.75 per
basket
Break-Even Point (s)
Breakeven occurs when:
QBE = FC / (P – V)
QBE = $100,000 / ($43.75 – $18.75)
QBE = 4,000 Units

SBE = (QBE )(V) + FC

SBE = (4,000 )($18.75) + $100,000
SBE = $175,000
 Break-Even Chart
Total Revenues

Profits
REVENUES AND COSTS

250
($ thousands)

Total Costs
175

Fixed Costs
100
Losses
Variable Costs
50

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

QUANTITY PRODUCED AND SOLD
 Degree of Operating
Leverage (DOL)
Degree of Operating Leverage Persentase
perubahan dalam perusahaan laba operasi
(EBIT) yang dihasilkan dari perubahan 1
persen dalam output (penjualan).
DOL at Q Percentage change in
units of operating profit (EBIT)
output =
Percentage change in
(or sales)
output (or sales)
 Computing the DOL

Calculating the DOL for a single product or a

single-product firm.

DOLQ units Q (P – V)
=
Q (P – V) – FC

= Q
Q – QBE
Computing the DOL

Calculating the DOL for a

multiproduct firm.

DOLS dollars of S – VC
=
sales
S – VC – FC

EBIT + FC
=
EBIT
Break-Even Point Example

Lisa Miller wants to determine the

degree of operating leverage at sales
levels of 6,000 and 8,000 units. As we
did earlier, we will assume that:
• Fixed costs are $100,000
• Baskets are sold for $43.75 each
• Variable costs are $18.75 per
basket
 Computing BW’s DOL
Computation based on the previously
calculated break-even point of 4,000 units

6,000
DOL6,000 units = = 3
6,000 – 4,000
8,000 2
DOL8,000 units = =
8,000 – 4,000
* Dari perhitungan di atas ketika output ditingkatkan dari 6000 menjadi 8000,
tingkat elastisitas oeprasi menurun dari 3 menjadi 2. maka semaki jauh
tingkat output dari titik impas, semakin rendah tingkat elastisitas operasi.
 Interpretation of the DOL

Peningkatan 1% penjualan di atas tingkat

8.000 Unit meningkatkan EBIT sebesar 2%
karena leverage operasi yang ada
perusahaan.

8,000 2
DOL8,000 units = =
8,000 – 4,000
 Interpretation of the DOL

5
DEGREE OF OPERATING

4
3
LEVERAGE (DOL)

2
1
0
2,000 4,000 6,000 8,000
–1
–2
–3 QBE
–4
–5

QUANTITY PRODUCED AND SOLD

 Interpretation of the DOL
Key Conclusions to be Drawn from the
previous slide and our Discussion of DOL
– DOL adalah ukuran kuantitatif dari "sensitivitas" dari laba
operasi perusahaan untuk perubahan penjualan
perusahaan.
– Semakin dekat bahwa perusahaan beroperasi ke titik
impas, yang lebih tinggi adalah nilai absolut dari DOL nya.
– Ketika membandingkan perusahaan, perusahaan dengan
DOL tertinggi adalah perusahaan yang akan paling
"sensitif" untuk perubahan penjualan.
 DOL and Business Risk
Business Risk – Ketidakpastian yang
melekat dalam operasi fisik perusahaan.
Dampaknya ditampilkan dalam variabilitas
laba usaha perusahaan (EBIT).
• DOL hanya salah satu komponen dari risiko
bisnis dan menjadi "aktif" hanya di hadapan
penjualan dan variabilitas biaya produksi.
• DOL memperbesar variabilitas laba operasi
dan, karenanya, risiko bisnis.
Application of DOL for Our Three-Firm Example

The ranked results indicate that the firm most

sensitive to the presence of operating leverage is
Firm F.
Firm F DOL = 8.0
Firm V DOL = 6.6
Firm 2F DOL = 2.0
Firm F will expect a 400% increase in profit from a 50%
increase in sales (see Slide 16–7 results).
 Financial Leverage

Financial Leverage – Penggunaan

biaya pendanaan tetap oleh
perusahaan. Disebut juga gearing.
– Leverage keuangan diperoleh
oleh pilihan.
– Digunakan sebagai sarana
meningkatkan laba kepada
pemegang saham umum.
EBIT-EPS Break-Even, or Indifference, Analysis

EBIT-EPS Break-Even Analysis – Analisis

pengaruh alternatif pembiayaan pada laba
per saham. Break-even point adalah
tingkat EBIT di mana EPS adalah sama
untuk dua (atau lebih) alternatif

Hitung EPS untuk tingkat tertentu EBIT pada struktur

pembiayaan yang diberikan.

(EBIT – I) (1 – t) – Pref. Div.

EPS =
NS
EBIT-EPS Break-Even, or Indifference, Analysis

(EBIT – I) (1 – t) – Pref. Div.

EPS =
NS

I = bunga tahunan yang dibayarkan

PD = Dividen tahunan saham yang dibayarkan
t = tarif pajak perusahaan
NS = jumlah per lembar saham biasa yang beredar
 Ilustrasi Soal
• Perhitungan laba per lembar saham
Perusahaan ban Cherokee dengan pendanaan jangka panjang
$10.000.000 yang seluruhnya terdiri dari ekuitas saham biasa,
ingin mengumpulkan tambahan dana $5.000.000 untuk
perluasan melalui salah satu dari rencana pendanaan, yaitu: 1)
seluruh saham biasa, 2) seluruh hutang pada tingkat bunga
12%, atau 3) seluruh saham preferen dengan dividen 11%.
Laba operasi saat ini sebesar $1.500.000 dengan peningkatan
laba diharapkan menjadi $2.700.000. Tarif pajak penghasilan
40%, dan pada saat ini terdapat 200.000 lembar saham biasa
beredar. Saham biasa dapat dijual seharga $50 per lembar jika
menggunakan pilihan pendanaan yang pertama dengan
tambahan 100.000 lembar saham tambahan.
 Perhitungan EPS
Saham Biasa Hutang Saham Preferen
1. EBIT 2.700.000 2.700.000 2.700.000
2. Bunga (12% x 5.000.000) 0 600.000 0
3. EBT 2.700.000 2.100.000 2.700.000
4.Pajak Pendapatan
(EBIT)x(t) 1.080.000 840.000 1.080.000
5. EAT 1.620.000 1.260.000 1.620.000
6.Deviden Saham Pref
(11% x 5.000.000) 0 0 550.000
7.Laba yang tersedia untuk
pemegang saham biasa 1.620.000 1.260.000 1.070.000
8.Jumlah Lembar saham
biasa yang beredar 300.000 200.000 200.000
9. EPS (7/8) 5,40 6,30 5,35

EPS = (EBIT – I) (1 – t) – Pref. Div.

NS
 Membuat Bagan Impas
• Menghubungkan titik EPS dengan EBIT
• Asumsikan EPS = 0
• Alternatif saham
0 = (EBIT – I) (1 – t) – PD
= (EBIT – 0) (1 – 0,4) – 0
= (EBIT)(0,6)
EBIT = 0/(0,6) = 0
• Hutang
0 = (EBIT – I) (1 – t) – PD
= (EBIT – 600.000) (1 – 0,4) – 0
= (EBIT)(0,6) – 360.000
EBIT = 360.000/(0,6) = 600.000
• Saham Preferen
0 = (EBIT – I) (1 – t) – PD
= (EBIT – 0) (1 – 0,4) – 550.000
= (EBIT)(0,6) – 550.000
EBIT = 550.000/(0,6) = 916.667
 Hutang
Saham Biasa

7 Saham Preferen

6
Titik indiferens

4
Titik indiferens
3

0
1 2 3 4
EBIT (dalam jutaan)
Mengitung Titik Indeferens Secara Matematis

Titik indeferens => tingkat laba operasi (EBIT)

yang menghasilkan tingkat laba per lembar
saham (EPS) yang sama untuk dua pilihan strutur
modal
 Kesimpulan
• Terdapat dua titik indeferens yaitu:
1) Antara saham biasa dan hutang berada pada EBIT $
1.800.000
2) Antara saham biasa dan saham preferen berada pada
EBIT $ 2.750.000
3) Memiliki arti jika estimasi laba yang diharapkan kurang
dari $ 1.800.000 dengan nilai ekspansi $ 5.000.000
sebaiknya dipenuhi dengan saham biasa
4) Jika estimasi laba yang diharapkan lebih dari $ 1.800.000
dengan nilai ekspansi 5.000.000 sebaiknya dengan
pendanaan hutang
5) Jika menilik dari tingkat indeferens kedua sebesar $
2.750.000 alternatif terbaik untuk estimasi laba $
2.700.000 adalah saham biasa namun dikembalikan lagi
pada titik indeferens pertama dan dibandingkan dengan
EPS pendanaan hutang.
 Degree of Financial Leverage (DFL)

Degree of Financial Leverage – Persentase

perubahan dalam laba per lembar saham
akibat dari perubahan 1% dalam laba
operasi
DFL at Percentage change in
EBIT of X earnings per share (EPS)
dollars =
Percentage change in
operating profit (EBIT)
 Computing the DFL

Calculating the DFL

DFL EBIT of $X EBIT

=
EBIT – I – [ PD / (1 – t) ]

EBIT = Earnings before interest and taxes

I = Interest
PD = Preferred dividends
t = Corporate tax rate
Degree of Financial Leverage (DFL)

DFL saham preferen lebih besar dibandingkan dengan

pendanaan hutang. Hal ini disebabkan bunga dapat
dikurangkan dengan pada perhitungan pajak sedangkan
deviden tidak.
 Financial Risk
Financial Risk – The added variability in earnings
per share (EPS) – plus the risk of possible
insolvency – that is induced by the use of financial
leverage.
– Debt increases the probability of cash insolvency over
an all-equity-financed firm. For example, our example
firm must have EBIT of at least $100,000 to cover the
interest payment.
– Debt also increased the variability in EPS as the DFL
increased from 1.00 to 1.25.
 Total Firm Risk
Total Firm Risk – Perbedaab laba per lembar
saham. Merupakan junlah risiko bisnis ditambahn
risiko keuangan.

Total firm risk = business risk + financial risk

– CVEPS is a measure of relative total firm risk
– CVEBIT is a measure of relative business risk
– The difference, CVEPS – CVEBIT, is a measure of
relative financial risk
 Degree of Total Leverage (DTL)
Degree of Total Leverage – Perubahan
Persentase dalam EPS perusahaan yang
disebabkan oleh perubahan 1% dalam
output (penjualan).

DTL at Q units Percentage change in

(or S dollars) of earnings per share (EPS)
=
output (or Percentage change in
sales) output (or sales)
 Computing the DTL
DTL Q units (or S dollars) = ( DOL Q units (or S dollars) )
x ( DFL EBIT of X dollars )

EBIT + FC
DTL S dollars =
EBIT – I – [ PD / (1 – t) ]
of sales

Q (P – V)
DTL Q units =
Q (P – V) – FC – I – [ PD / (1 – t) ]
 Ilustrasi Soal
Sebuah perusahaan yang memproduksi helm
sepeda digunakan untuk mengilustrasikan
pengungkit operasi. Perusahaan tersebut memiliki
hutang dengan tingkat bunga 8%. Harga jual $50,
biaya variabel $25 dan biaya operasi tahunan
adalah $100.000. Tarif pajak diasumsikan 40%,
jumlah lembar saham beredar sebesar 10,000, dan
perusahaan ingin menentukan DTL pada penjualan
8000 unit.
Q (P – V)
DTL Q units =
Q (P – V) – FC – I – [ PD / (1 – t) ]
 Ilustrasi Soal
Solusi

DTL Q units = Q (P – V)
Q (P – V) – FC – I – [ PD / (1 – t) ]
 What is an Appropriate
Amount of Financial Leverage?
Debt Capacity – Jumlah hutang maksimum (dan
pendanaan biaya tetap lainnya) yang dapat dibayar
perusahaan.
– Firms must first analyze their expected future
cash flows.
– The greater and more stable the expected future
cash flows, the greater the debt capacity.
– Fixed charges include: debt principal and interest
payments, lease payments, and preferred stock
dividends.
 Coverage Ratios

Income Statement Interest Coverage

Ratios
EBIT
Interest expenses
Coverage Ratios

Indicates a firm’s A ratio value equal to 1

indicates that earnings
ability to cover interest
are just sufficient to
charges. cover interest charges.
 Coverage Ratios
Income Statement Debt-service Coverage
Ratios
EBIT
{ Interest expenses + [Principal payments
Coverage Ratios / (1-t) ] }

Indicates a firm’s Allows us to examine the

ability to cover ability of the firm to meet
interest expenses and all of its debt payments.
principal payments. Failure to make principal
payments is also default.
 Coverage Example
Make an examination of the coverage
ratios for Basket Wonders when
EBIT=$500,000. Compare the equity and
the debt financing alternatives.

Assume that:
• Interest expenses remain at $100,000
• Principal payments of $100,000 are made
yearly for 10 years
 Coverage Example
Compare the interest coverage and debt burden
ratios for equity and debt financing.
Interest Debt-service
Financing Coverage Coverage
Equity Infinite Infinite
Debt 5.00 2.50
The firm actually has greater risk than the interest
coverage ratio initially suggests.
PROBABILITY OF OCCURRENCE
Coverage Example
Firm B has a much
smaller probability
of failing to meet its
Firm B
obligations than Firm A.

Firm A

Debt-service burden
= $200,000

-250 0 250 500 750 1,000 1,250

EBIT ($ thousands)
 Summary of the Coverage
Ratio Discussion
• The debt-service coverage ratio accounts for
required annual principal payments.

• A single ratio value cannot be interpreted

identically for all firms as some firms have greater
debt capacity.
• Annual financial lease payments should be added
to both the numerator and denominator of the
debt-service coverage ratio as financial leases
are similar to debt.
 Other Methods of Analysis
Capital Structure – The mix (or proportion) of a
firm’s permanent long-term financing represented
by debt, preferred stock, and common stock equity.

– Often, firms are compared to peer institutions in the

same industry.
– Large deviations from norms must be justified.
– For example, an industry’s median debt-to-net-worth
ratio might be used as a benchmark for financial
leverage comparisons.
 Other Methods of Analysis
Surveying Investment Analysts and Lenders
• Firms may gain insight into the financial
markets’ evaluation of their firm by
talking with:
– Investment bankers
– Institutional investors
– Investment analysts
– Lenders
 Other Methods of Analysis

Security Ratings

• Firms must consider the impact of any

financing decision on the firm’s
security rating(s).