Analisis Dan Dampak Leverage (12)

Analisis dan Dampak Leverage

leverage

• penggunaan assets dan sumber dana oleh perusahaan yang memiliki biaya tetap dengan maksud agar peningkatan keuntungan potensial pemegang saham.

• leverage juga meningkatkan risiko keuntungan, karena jika perusahaan ternyata mendapatkan keuntungan lebih rendah dari biaya tetapnya maka penggunaan leverage akan menurunkan keuntungan pemegang saham.

risiko bisnis dan risiko keuangan

• Risiko bisnis mengacu pada penyimpangan laba sebelum pajak dan bunga yang diharapkan.

• Risiko keuangan merupakan tambahan variabilitas dalam laba yang tersedia bagi pemegang saham biasa perusahaan serta peningkatan kemungkinan insolvensi saham biasa sebagai akibat dari penggunaan leverage keuangan.

Financial leverage

• penggunaan sumber dana yang memiliki beban tetap dengan harapan bahwa akan memberikan tambahan keuntungan yang lebih besar daripada beban tetapnya sehingga akan meningkatkan keuntungan yang tersedia bagi pemegang saham. Penggunaan financial leverage dengan harapan agar terjadi perubahan laba per lembar saham yang lebih besar dari pada perubahan laba sebelum pajak dan bunga.

Operating leverage

• mengacu pada adanya biaya operasi tetap dalam aliran pendapatan perusahaan. Dengan menggunakan biaya operasi tetap perusahaan mengharapkan bahwa perubahan penjualan akan mengakibatkan perubahan laba sebelum pajak dan bunga yang lebih besar.

Leverage Operating Leverage:

The use of fixed operating costs as opposed to variable operating costs

A firm with relatively high fixed operating costs will experience more variable operating income if sales change

Financial Leverage: The use of fixed-cost sources of financing (debt,

preferred stock) rather than variable-cost sources (common stock)

Leverage Analysis Operating Leverage

Affects a firm’s business risk Business risk is the variability or uncertainty of a

firm’s operating income (EBIT) Financial Leverage

Affects a firm’s financial risk Financial risk is the variability or uncertainty of a

firm’s earnings per share (EPS) and the increased probability of insolvency that arises when a firm uses financial leverage

Breakeven Analysis Illustrates the effects of operating leverage Useful for forecasting the profitability of a firm,

division or product line Useful for analyzing the impact of changes in

fixed costs, variable costs, and sales price Terms:

P: price per unit, Q: quantity produced, V: variable costs per unit, VC; total variable costs, F; total fixed costs, TC: total cost (VC+F), S: sales ($)

Quantity

$

Total Revenue(PQ)

Breakeven Analysis

Costs

Suppose the firm has both fixed operating costs (administrative salaries, insurance, rent, property tax) and variable operating costs (materials, labor, energy, packaging, sales commissions)

Quantity

{

$

Total Revenue

Total Cost(QV)+F or

VC+F

FC

Q1

+

-

}

Breakeven Analysis

EBIT

Breakeven EBIT

Operating Leverage

What happens if the firm increases its fixed operating costs and reduces (or eliminates) its variable costs?

Quantity

$

Total Revenue

Total Cost= FixedFC

Q1

+

-

EBIT

Breakeven Analysis

Breakeven EBIT

{}

With high operating leverage, an increase in sales produces a relatively larger increase in

operating income.

Trade-off: the firm has a higher breakeven point. If sales are not high enough, the firm will not meet its fixed expenses!

Breakeven Calculations – Quantity

Marginon Contributi theis V-P

unitper cost variable:V

unitper price sales :P

costs fixed danticipate total:F

Q of levelbreakeven :Q

whereV-P

F=Q

B

B

Breakeven Calculations – Sales

constant be toassumed is S

VC that Note

costs variable total:VC

sales total:S

costs fixed total:F

sales of levelbreakeven :S*

whereS

VC-1

F=*S

sales

- variable costs

- fixed costs

operating income (EBIT)

- interest

EBT

- taxes

net income

} contribution margin

Analytical Income Statement

EBT (1 – t) = Net Income,

so,

Net Income / (1 – t) = EBT

Degree of Operating Leverage (DOL)

Operating leverage: by using fixed operating costs, a small change in sales revenue is magnified into a larger change in operating income

This “multiplier effect” is called the degree of operating leverage

Degree of Operating Leveragefrom Sales Level (S)

salessalesin change

EBITEBITin change

salesin change %

EBITin change %SDOL

Above calculation requires two analytical income statements, one for the base period and one for the following period using the new level of sales

If we have the base level data, we can use this formula:

Degree of Operating Leveragefrom Sales Level (S)

FVPQ

VPQDOLS

)(

)(

EBIT

Costs Variable - Sales

Implicit assumption is that Variable Costs / Sales and Fixed Costs stay the constant

If DOL = 2, then a 1% increase in sales will result in a 2% increase in operating income (EBIT) and vice versa

%Δ in EBIT = DOLSales x %Δ in Sales

Degree of Financial Leverage (DFL)

Financial leverage: by using fixed cost financing, a small change in operating income is magnified into a larger change in earnings per share (EPS)

This “multiplier effect” is called the degree of financial leverage

Degree of Financial Leverage

EBITEBITin change

EPSEPSin change

EBITin change %

EPSin change %EBITDFL

Each financing or capital structure (relative use of debt and equity) alternative will have a different degree of financial leverage (DFL)


Instead of calculating DFL for each alternative capital structure we can use the following formula with the base EBIT and differing interest expenses

Note that interest expense would be based on how much debt is used financing the assets of the firm

If DFL = 3, then a 1% increase in operating income will result in a 3% increase in earnings per share and vice versa

%Δ in EPS = DFLEBIT x %Δ in EBIT

IEBIT

EBITDFLEBIT

Degree of Combined Leverage (DCL)

Combined leverage: by using operating leverage and financial leverage, a small change in sales is magnified into a larger change in earnings per share

This “multiplier effect” is called the degree of combined leverage

Degree of Combined Leverage

SalesSalesin change

EPSEPSin change

Salesin change %

EPSin change %

)()(

S

S

EBITSS

DCL

DCL

DFLXDOLDCL


If we have the base level data, we can use this formula:

If DCL = 4, then a 1% increase in sales will result in a 4% increase in earnings per share

%Δ in EPS = DCLSales x %Δ in Sales

IFVPQ

VPQDCL

DCL

S

S

)(

)(I - EBIT


Example Based on the following information on a

Levered Company, answer these questions:

1) If sales increase by 10%, what should happen to operating income?

2) If operating income increases by 10%, what should happen to EPS?

3) If sales increase by 10%, what should be the effect on EPS?

Levered Company – Data

Sales (100,000 units) $1,400,000

Variable Costs $800,000

Fixed Costs $250,000

Interest paid $125,000

Tax rate 34%

Shares outstanding 100,000

Sales

EBITEPS

DOL

DFL

DCL

Leverage

Levered Company – Base Level Data

Sales (100,000 units) $1,400,000

Variable Costs ($800,000)

Fixed Costs ($250,000)

EBIT (Operating Income) $350,000)

Interest paid ($125,000)

EBT $225,000

Tax @ 34% ($76,500)

EAT (Net Income) $148,500

EPS = $148,500 / 100,000 = $1.485

Degree of Operating Leverage from Sales Level (S)

714.1000,350

000,80000,400,1EBIT


D

S

DOL

DOL

Answer to part 1: %Δ in EBIT = DOLSales x %Δ in Sales %Δ in EBIT = 1.714 x 10% = 17.14%


556.1000,225

000,350

EBIT

EBIT

DFL

IEBIT

EBITDFL

Answer to part 2: %Δ in EPS = DFLEBIT x %Δ in EBIT %Δ in EPS = 1.556 x 10% = 15.56% %Δ in EPS = 1.556 x 17.14% = 26.67% (cumulative

impact of part 1


667.2000,225

000,800000,400,1I - EBIT


S

S

DCL

DCL

Answer to part 3: Alternatively DCL = DOL x DFL DCL = 1.714 x 1.556 = 2.667 %Δ in EPS = 2.667 x 10% = 26.67%

Levered Company

Sales

EBITEPS

DOL = 1.714

DFL =1.556

DCL = 2.667

Sales (110,000 units) 1,540,000

Variable Costs (880,000)

Fixed Costs (250,000)

EBIT 410,000 ( +17.14%)

Interest (125,000)

EBT 285,000

Taxes (34%) (96,900)

Net Income 188,100

EPS $1.881 ( +26.67%)

Levered Company10% increase in sales

Analisis Dan Dampak Leverage (12)

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