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The cost of an enterprise in a certain period will directly affect the realization of income. At the same time, the change of enterprise cost structure will also have a certain impact on its income. Therefore, under the condition of market economy, enterprises must attach importance to analyzing the impact of cost changes on income if they want to achieve good benefits. The author tries to talk about the impact on corporate profits from the perspective of corporate operating leverage and financial leverage.
First, the impact of operating leverage on corporate earnings.
The cost of an enterprise can be divided into two parts according to its characteristics: variable cost and fixed cost. Within the relevant scope, the change of enterprise's production and sales volume will not change its total fixed cost, but will increase or decrease the fixed cost shared by enterprise's unit products, thus improving or reducing the realization of enterprise's income.
Assume that the relevant data of enterprise A and enterprise B are as follows (table 1):
Project a enterprise b enterprise
Product sales 1 10,000 pieces.
Unit price 50 yuan 50 yuan
Unit variable cost 30 yuan 20 yuan
The total fixed cost is 100000 yuan and 200000 yuan.
Pre-tax income 100000 yuan
As can be seen from the table 1, although the cost structure of enterprise A and enterprise B is different, their pre-tax income is the same. From this point of view, the cost structure seems to have no effect on the income of enterprises. However, if the sales volume of enterprise A and enterprise B changes, the impact on income will be very different.
If the sales of enterprise A and enterprise B increase by 65,438+00% respectively, other things being equal, the impact of sales changes on income is as follows (Table 2):
Project a enterprise b enterprise
Product sales 1 1000 pieces.
Unit price 50 yuan 50 yuan
Unit variable cost 30 yuan 20 yuan
The total fixed cost is 100000 yuan and 200000 yuan.
Pre-tax income 120000 yuan
Obviously, the increase in sales is the same, but the increase in corporate income is different. This phenomenon that the benefit change is greater than the sales change is the result of operating leverage's action.
In general, enterprises with high fixed cost and low variable cost structure have stronger operating leverage effect (as in Example B above) and greater operational risk compared with enterprises with low fixed cost and high variable cost structure. On the contrary, its operating leverage function is weak, and its operational risk is small. The operating leverage of an enterprise can be expressed by the operating leverage ratio.
Operating leverage rate (DOL) = income change rate ÷ sales change rate.
Or = total marginal contribution ÷ pre-tax income
According to the data in table 1, the operating leverage rates of enterprise A and enterprise B are as follows:
Enterprise a: dol = (50-30) ×10000 ÷100000 = 2 (times)
Enterprise b: dol = (50-20) ×10000 ÷100000 = 3 (times)
The income growth of enterprise A is twice that of its product sales, that is, if the sales volume increases by 10%, its income will increase by 20% (10% × 2); Similarly, the revenue growth of enterprise B is three times that of its product sales (that is, the revenue growth is 30%).
Generally speaking, the operating leverage rate of an enterprise decreases with the increase of sales volume and income. The closer to the breakeven point, the higher the operating leverage rate. When the enterprise income tends to zero, the operating leverage rate is infinite. It must be pointed out that operating leverage's influence is two-way. If the sales volume of an enterprise declines, its income will also be reduced by several times as much as the sales volume decline. Therefore, enterprises can make full use of operating leverage to control and regulate their business activities according to its characteristics.
From the above formula of operating leverage rate, it can be further deduced that:
Operating leverage rate = (pre-tax income+total fixed cost) ÷ pre-tax income = 1+ total fixed cost ÷ pre-tax income.
From the calculation results of this formula, we can know that as long as there is a fixed cost, the operating leverage rate is always greater than 1, and the operating leverage rate changes in the same direction with the change of the total fixed cost. That is, the greater the proportion of fixed costs, the higher the operating leverage; On the contrary, the lower the operating leverage rate. Therefore, if the enterprise can reasonably control the fixed cost expenditure in the process of production and operation, it can not only provide equal income, but also reduce the business risk of the enterprise.
On the other hand, the operating leverage ratio formula can be adjusted as follows:
Operating leverage rate = total marginal contribution/pre-tax income = unit marginal contribution × sales volume/(unit marginal contribution × sales volume-total fixed cost).
It can be seen that the operating leverage rate changes inversely with the change of product sales volume, that is, with the increase of sales volume, the operating leverage rate will decrease and the business risk of the enterprise will also decrease; On the other hand, the decline in sales will lead to an increase in operating leverage rate, thus increasing the business risks of enterprises. Therefore, enterprises should make full use of the existing production capacity to expand sales, which can not only increase the income of enterprises, but also reduce the business risks of enterprises.
Second, the impact of financial leverage on corporate earnings
In the process of production and operation, borrowing is inevitable. If the enterprise borrows a lot, it is more likely that it will not be able to repay the due principal and interest, which will lead to a sharp rise in the financial risks faced by the enterprise and adversely affect the realization of the enterprise's income. The financial risk of an enterprise mainly comes from the level of financial leverage.
The so-called financial leverage refers to the sensitivity of earnings per share to operating net profit, or the influence of corporate liabilities on the earnings of ordinary shareholders. The function of financial leverage can be expressed by financial leverage ratio.
Financial leverage ratio = pre-tax profit and interest payment ÷ (pre-tax profit and interest payment-interest expense-preferred stock dividend)
The financial leverage ratio reflects the relationship between pre-tax income and interest payment and the distribution of profits by ordinary shareholders. Under the condition of constant income, the greater the debt ratio, the more debt interest and the higher its financial leverage ratio. Therefore, the financial leverage ratio reflects the capital structure and financial risks of enterprises.
Assume that the relevant financial information of enterprise A and enterprise B is as follows (Table 3):
Project a enterprise b enterprise
Capital structure: the capital stock is 6,543,800 yuan (50,000 shares) and 500,000 yuan (20,000 shares).
Debt 500,000 (8% per annum)
The income before interest and tax is 654.38 million yuan.
Interest (8% per annum) 40,000 yuan.
Pre-tax income is 654.38+100000 yuan, 60000 yuan.
Income tax (33%) is 33,000 yuan, 65,438 yuan+9,800 yuan.
After-tax profits are 67,000 yuan and 40,200 yuan.
Earnings per share 1.34 yuan 2.0 1 yuan.
Financial leverage ratio 1 1.67
Note: The share capital of both enterprises is common stock.
As can be seen from Table 3, due to the different capital structures of enterprises A and B, financial leverage has different effects on shareholders' income. The financial leverage ratio of enterprise B is higher than that of enterprise A, so the earnings per share of common shareholders of enterprise B is higher than that of enterprise A (that is, 2.0 1 yuan > 1.34 yuan). From the shareholders' point of view, as long as the return on investment is greater than the debt interest rate, the financial leverage of the enterprise can increase the income for ordinary shareholders, and borrowing is beneficial. Therefore, enterprise managers have no reason to refuse to use financial leverage. On the other hand, the higher the financial leverage ratio, the greater the impact on the earnings per share of common stock, indicating that the higher the financial risk of enterprises. Therefore, when enterprises use financial leverage, they must weigh and compare the higher income that shareholders may get and the financial risks that they may bear, so as to minimize the adverse impact of financial leverage on enterprise income.
Third, the impact of comprehensive leverage on the company's earnings.
Compound leverage is the comprehensive influence of operating leverage and financial leverage on corporate income. As mentioned earlier, operating leverage refers to the influence of fixed costs on the change of corporate earnings (EBIT), and financial leverage refers to the influence of corporate liabilities on the change of earnings per share of common stock (EPS). Operating leverage determines the earnings of an enterprise, and financial leverage determines how the earnings of an enterprise are distributed to shareholders in the form of earnings per share. In terms of time, operating leverage plays a leading role and financial leverage plays a trailing role.
The role of corporate compound leverage can be expressed by compound leverage ratio, which can be calculated in two ways:
1, compound leverage ratio (DCL) = operating leverage ratio (DOL)× financial leverage ratio (DFL).
2. Compound leverage ratio = (sales revenue-total variable cost) ÷ [sales revenue-total variable cost-total fixed cost-interest-preferred stock dividend ÷( 1- income tax rate)].
Assume that the relevant information of enterprise A and enterprise B is arranged as follows (Table 4):
Project a enterprise b enterprise
1. The sales income is 500,000 yuan.
2. Less: The total variable cost is RMB 300,000 and RMB 200,000.
3. The total fixed cost is 100000 yuan and 200000 yuan.
4. Pre-tax profit 100000 yuan.
5. Less: interest-40,000 yuan
6. Pre-tax profit100,000 yuan 60,000 yuan
7. Deduction: income tax (33%) is 33,000 yuan 1.98 million yuan.
8. After-tax profits are 67,000 yuan and 40,200 yuan.
9. Earnings per share 1.34 yuan 2.05438+0 yuan.
10. operating leverage ratio [( 1-2) ÷ 4] 2 3
1 1. Financial leverage ratio (4/6) 1 1.67
12. Compound leverage ratio [10× 1 1 or 2 5]
( 1-2)/6〕
According to the data in Table 4, the compound leverage ratio of Enterprise A is 2; The compound leverage ratio of enterprise B is 5. If the price and cost levels of enterprise A and enterprise B remain unchanged, the sales revenue will increase by 65,438+00%, which will have the following impacts on enterprise income:
The pre-tax net profit and after-tax net profit of enterprise A will increase by 20% (10% × 2), which are 120000 yuan and 80400 yuan respectively;
Enterprise B's pre-tax net profit and after-tax net profit will increase by 50% (10% × 5), reaching 90,000 yuan and 60,300 yuan respectively.
On the other hand, if the sales revenue of both companies is reduced by 20%, the impact on corporate income will be:
The pre-tax net profit of enterprise A will be reduced by 40% (20% × 2) to 60,000 yuan; After-tax net profit also decreased by 40% to 40,200 yuan. The pre-tax net profit of enterprise B will decrease by 100% (20% × 5) to zero.
In order to provide ideal returns for shareholders, enterprises must reasonably match operating leverage and financial leverage, and seek suitable composite leverage, so as to reduce business risks and financial risks in the production and operation of enterprises and realize the optimization of enterprise returns. Generally speaking, the allocation of high operating leverage ratio and high financial leverage ratio is unwise, because they will have a drastic impact on the income of enterprises, which will lead to an increase in the risk of business activities. Therefore, enterprises should coordinate high operating leverage ratio and low financial leverage ratio, that is, when enterprises invest in large-scale fixed assets, their sources of funds can mainly adopt the way of issuing additional common shares and borrowing a small amount as appropriate; Or we can combine the lower operating leverage ratio with the higher financial leverage ratio, that is, we can appropriately increase the scale of debt financing under the condition that enterprises expand their investment less. In this way, by adjusting the investment scale and changing the financing structure, we can choose the compound leverage suitable for enterprises, and minimize the impact of operational risks and financial risks on enterprise income.
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