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Operational financial and operational financial leverage. Operating leverage. What is financial and operational leverage

Financial leverage characterizes the use of borrowed funds by the enterprise, which affect the measurement of the profitability ratio equity. Financial leverage is an objective factor that arises with the advent of borrowed funds in the amount of capital used by the enterprise, allowing it to receive additional profit on equity. The formation of financial leverage is presented in "Fig 1":

“Fig.1. The structure of the formation of financial leverage»

The greater the relative amount of borrowed funds attracted by the enterprise, the greater the amount of interest paid on them, and the higher the level of financial leverage. Therefore, this indicator also allows you to estimate how many times the gross income of the enterprise (from which interest is paid on the loan) exceeds taxable profit.

Financial leverage allows us to distinguish three main components in it:

1. Tax corrector of financial leverage (1-Snp), which shows the extent to which the effect of financial leverage is manifested due to different levels of profit taxation.

The tax corrector can be used in the following cases:

a) if differentiated profit tax rates are established for various types of activities of the enterprise;

b) if certain types activities, the company uses tax benefits on profits;

c) if individual subsidiaries of the enterprise operate in the free economic zones of their country, where there is a preferential regime for profit taxation;

d) if individual subsidiaries of the enterprise operate in states with a lower level of income taxation

2. Financial leverage differential (CVR-PC), which characterizes the difference between the gross return on assets and the average interest rate for a loan. The financial leverage differential is the main condition, forming a positive effect of financial leverage. This effect appears only if the level of gross profit generated by the assets of the enterprise exceeds the average interest rate for the loan used. The higher the positive value of the financial leverage differential, the higher, other things being equal, its effect will be.

3. The coefficient of financial leverage (LC / CK), which characterizes the amount of borrowed capital used by the enterprise, per unit of equity. The financial leverage ratio is that leverage (leverage in literal translation - leverage), which causes a positive or negative effect obtained due to its corresponding differential. With a positive value of the differential, any increase in the financial leverage ratio will cause an even greater increase in the return on equity ratio, and with a negative value of the differential, an increase in the financial leverage ratio will lead to an even greater rate of decline in the return on equity ratio. In other words, an increase in the financial leverage ratio causes an even greater increase in its effect.

Thus, with the differential unchanged, the financial leverage ratio is the main generator of both the increase in the amount and level of return on equity, and the financial risk of losing this profit. Similarly, with a constant financial leverage ratio, the positive or negative dynamics of its differential generates both an increase in the amount and level of return on equity, and the financial risk of its loss.

- Calculation of the financial leverage of the enterprise

Financial leverage is calculated as the ratio of the total advanced capital of the enterprise to equity capital:

Kfz \u003d ZK / SK, (3.5)

i.e. characterizes the ratio between borrowed and own capital. This indicator is one of the most important, since it is associated with the choice of the optimal structure of sources of funds.

An indicator that reflects the level of additionally generated return on equity with a different share of the use of borrowed funds is called the effect of financial leverage. It is calculated using the following formula:

EFL \u003d (1 - Snp) x (KVRa - PC) x ZK / SK, (3.6)

where EFL is the effect of financial leverage, which consists in the increase in the return on equity ratio,%; Snp - income tax rate, expressed as a decimal fraction; КВРа - coefficient of gross profitability of assets (the ratio of gross profit to the average value of assets),%; PC - the average amount of interest on a loan paid by the enterprise for the use of borrowed capital,%; ZK - the average amount of borrowed capital used by the enterprise; SC - the average amount of equity capital of the enterprise.

- Operating leverage

Operating (production) leverage depends on the structure of production costs and, in particular, on the ratio of conditionally fixed and conditionally variable costs in the cost structure. Therefore, production leverage characterizes the relationship between the cost structure, output and sales, and profit. Production leverage shows the change in profit depending on the change in sales volumes.

The concept of operating leverage is associated with the cost structure and, in particular, with the ratio between conditionally constant and conditionally variable costs. Consideration of the cost structure in this aspect allows, firstly, to solve the problem of profit maximization due to the relative reduction of certain costs with an increase in the physical volume of sales, and, secondly, the division of costs into conditionally fixed and conditionally variable allows us to judge the payback costs and provides an opportunity to calculate the margin of financial strength of the enterprise in case of difficulties, complications in the market, thirdly, it makes it possible to calculate the critical sales volume that covers costs and ensures the break-even activity of the enterprise.

The solution of these problems allows us to come to the following conclusion: if an enterprise creates a certain amount of semi-fixed costs, then any change in sales revenue generates an even stronger change in profit. This phenomenon is called the operating leverage effect.

- Calculations of the operating leverage ratio and the effect of operating leverage

The operating leverage ratio shows the strength of the operating leverage. It is calculated using the following formula:

K ol \u003d And post / And o (3.7)

Where And post is the sum of fixed operating costs. And o is the total amount of operating costs.

The effect of production leverage is that a change in sales revenue always results in a larger change in earnings. The strength of operating leverage is a measure of the entrepreneurial risk associated with an enterprise. The higher it is, the greater the risk to shareholders; profit margin. This is the amount of sales proceeds at which zero profit is achieved with zero losses.

The effect is calculated using the following formula:

E ol \u003d ΔVOP / ΔOR, (3.8)

Where ΔVOP is the growth rate of gross operating profit in % ΔOR is the growth rate of sales volume in %

3.3 Dividend policy. Formation of operating profit

The main goal of developing a dividend policy is to establish the necessary proportionality between the current consumption of profit by the owners and its future growth, maximizing market value enterprise and ensuring its strategic development.

Based on this goal, the concept of dividend policy can be formulated as follows: dividend policy is constituent part a general policy of profit management, which consists in optimizing the proportions between its consumed and capitalized parts in order to maximize the market value of the enterprise.

- Characteristics of the types and approaches of the company's dividend policy.

There are three approaches to the formation of dividend policy - "conservative", "moderate" ("compromise") and "aggressive". Each of these approaches corresponds to a certain type of dividend policy.

1. Residual dividend policy assumes that the dividend payment fund is formed after the need for the formation of its own financial resources is satisfied at the expense of profit, ensuring the full realization of the investment opportunities of the enterprise.

2. Policy of stable dividend payments involves the payment of a constant amount of them over a long period (at high inflation rates, the amount of dividend payments is adjusted for the inflation index).

3. Minimum Stable Dividend Policy with a premium in certain periods (or the policy of "extra-dividend"), according to a very common opinion, is the most balanced type of it.

4. Stable Dividend Policy provides for the establishment of a long-term normative ratio of dividend payments in relation to the amount of profit. The advantage of this policy is the simplicity of its formation and its close connection with the size of the formed profit”

5. Policy of constant increase in the amount of dividends(carried out under the motto - "never reduce the annual dividend") provides for a stable increase in the level of dividend payments per share. The increase in dividends in the implementation of such a policy occurs, as a rule, in a firmly established percentage of growth in relation to their size in the previous period (the “Gordon Model” is built on this principle, which determines the market value of the shares of such companies

In conclusion, they develop measures aimed at increasing the dividend return. share capital. These are mainly activities that increase net profit and return on equity.

- Financial mechanism for managing the formation of operating profit.

The mechanism for managing the formation of operating profit is built taking into account the close relationship of this indicator with the volume product sales, income and costs of the enterprise. The system of this relationship, called "The relationship of costs, sales volume and profit", allows you to highlight the role of individual factors in the formation of operating profit and ensure effective management of this process at the enterprise.

In the process of managing the formation of operating profit on the basis of the CVP system, the enterprise solves the following tasks:

1. Determination of the volume of sales of products that ensures break-even operating activities for a short period.

2. Determining the volume of sales of products that ensures break-even operating activities in the long run.

3. Determination of the required volume of product sales, ensuring the achievement of the planned amount of gross operating profit. This task can also be formulated in reverse: determining the planned amount of gross operating profit for a given planned volume of product sales.

4. Determining the sum of the "safety margin" of the enterprise, i.e. the size of a possible decrease in the volume of sales of products.

5. Determination of the required volume of product sales, ensuring the achievement of the planned (target) amount of marginal operating profit of the enterprise.

- The main goal of managing the formation of operating profit

The main goal of managing the formation of the operating profit of an enterprise is to identify the main factors that determine its final size, and to find reserves for a further increase in its amount.

The mechanism for managing the formation of operating profit is built taking into account the close relationship of this indicator with the volume of sales of products, income and expenses of the corporation. The system of this relationship, called „The relationship between costs, volume of sales and profit" allows you to highlight the role individual factors in the formation of operating profit and ensure the effective management of this process in the enterprise.

Receipt of gross income from the sale of products. The main sources of income from the sale is the gross income from the sale of goods. Gross income is equal to the sum of trade allowances.

Gross income is made up of Money received from the sale of goods, due to the difference between the sale price of goods and the price of their purchase. This part of the gross income is the trade markup.

The most important factors that shape the volume and level of gross income include

Volume, composition and assortment structure of trade turnover;

Terms of delivery of goods;

Economic feasibility of the trade markup;

Quantity and quality of additional services.

An increase in the volume of trade means an increase in the mass of gross income: the more goods sold, the greater the total mass of funds received from the trade allowance. The market model of the economy allows trade enterprises independently set surcharges for most product groups. It is only important to find a certain line in order, on the one hand, to prevent losses in the amount of income, and on the other hand, to maintain competitive prices.

A qualitative indicator of gross income from sales is the level of gross income: The amount of gross income = the amount of trade allowances

Svd \u003d (Sum of VD / To) * 100% (3.9)

The level of gross income shows the amount of income per ruble of turnover.

Net income from product sales. Net income from the sale of products is determined by subtracting from the income (proceeds) from the sale of products the relevant taxes, fees, discounts, etc.

The net income indicator is calculated according to the formula, where the numerator is the sum of depreciation of fixed assets and intangible assets plus net profit, the denominator is net proceeds from sales of products plus income from other sales and income from non-sales operations.

Calculation of marginal operating profit. Marginal operating income is the result of net operating income (i.e. without VAT) without fixed costs, its calculation is carried out by the following formula:

MOP=CHOD-Hypost; (3.10)

Where, WOD - the amount of net operating income in the period under review; Hypost - the sum of fixed operating costs.

Calculation of gross operating profit. Gross operating profit, its calculation is carried out according to the following formula:

VOP=CHOD-Io; VOP=MOP-Iper (3.11)

Where, CHOD - the amount of net operating income; Io - the total amount of transaction costs; Iper - the sum of variable operating costs

Calculation of net operating income. Net operating profit is income after taxes, it is also called after-tax operating profit (Net Operating Profit Less Adjusted Tax, NOPLAT). Net operating income does not take into account the factor that the business must cover both operating costs and capital expenditures.

Net operating income, its calculation is carried out according to the following formulas:

CHOP+CHOD-Io-NP; CHOP=MOP-Iper-NP; CHOP=VOP-NP; (3.12)

Where NP is the amount of income tax and other obligatory payments at the expense of profit.

Prodchenko I.A.

Operating leverage

The division of the entire set of operating costs of the enterprise into fixed and variable types of them allows you to use the operating profit management mechanism, known as "operating leverage".

In the most general form, leverage can be represented as a process of managing the assets and liabilities of an enterprise, aimed at increasing profits. Literally, this is a lever for lifting weights, that is, a certain factor, a small change in which can lead to a significant change in performance indicators, give the so-called leverage effect, or leverage effect.

Evaluation of the level of leverage allows you to identify the possibility of changing profitability indicators, the degree of risk, the sensitivity of profit to changes in internal production factors and the market situation. And since the factors affecting profits are divided into production and financial, respectively, the scope of the financial and production leverage is distinguished.

Production leverage ( operating lever) is a potential opportunity to influence the balance sheet profit by changing the cost structure and output volume (fixed and variable costs, optimization).

The action of operating leverage is based on the fact that the presence of any amount of their fixed types in the operating costs leads to the fact that when the volume of sales of products changes, the amount of operating profit always changes at a higher rate. In other words, fixed operating costs, by the very fact of their existence, cause a disproportionately higher change in the amount of the operating profit of the enterprise with any change in the volume of sales of products.

The action of the operating lever is associated with the different nature and influence of current costs on the production and sale of products. Depending on the change in the volume of production X, variable costs and conditionally fixed costs are distinguished, the study of which is the subject of break-even analysis. The results of such an analysis can be presented graphically (see Fig. 5.1).

The break-even analysis of production is based on the analytical representation of the break-even model (break-even formula):

Revenue = Costs

From this formula, all the basic parameters necessary to carry out the specified type of analysis are derived:

critical (break-even) production volume = profitability threshold;

the critical value of the selling price;

critical value of fixed costs;

critical value of variable costs.

For each of these parameters, a safety margin is calculated - a percentage of the planned, or actual, and critical value of the parameter. For the volume of production, this margin is called the margin of financial strength of the enterprise. It shows how many percent, if the situation on the market changes, the volume of production can fall up to a critical indicator.

Important concepts in managing the volume of production through a change in the cost structure are:

contributory margin (marginal income) is the difference between the price and specific variable costs;

the critical volume of production is the amount of production, the total marginal income from the sale of which covers conditionally fixed costs. At the same time, the volume of sales in physical units (X1), which provides a given gross income, is calculated by the formula:

The ratio of fixed and variable operating costs of an enterprise, which allows "turning on" the operating leverage mechanism with different intensity of impact on the operating profit of the enterprise, is characterized by the "operating leverage ratio", which is calculated by the following formula:

Where KOL is the operating leverage ratio;

Ipost - the amount of fixed operating costs;

I0 - the total amount of operating costs.

The higher the value of the operating leverage ratio at the enterprise, the more it is able to accelerate the growth rate of operating profit in relation to the growth rate of sales volume.

The specific ratio of the increase in the amount of operating profit and the amount of sales volume, achieved at a certain operating leverage ratio, is characterized by the “operational leverage effect” indicator. The principal formula for calculating this indicator is:

Where EOL is the effect of operating leverage achieved at a specific value of its coefficient at the enterprise;

By setting one or another rate of growth in the volume of sales of products, we can always, using the indicated formula, determine the extent to which the amount of operating profit will increase with the existing operating leverage ratio at the enterprise. Differences in the achieved effect at different enterprises will be determined by the differences in the ratio of their fixed and variable operating costs, reflected by the operating leverage ratio.

The above formula for calculating the effect of operational leverage has a number of modifications.

So, in order to manage the marginal profit of an enterprise, the effect of operating leverage can be expressed by the following formulas:

∆MP - growth rate of marginal operating profit, in %;

∆GRP - growth rate of gross operating profit, in %;

∆OR - growth rate of sales volume, in%.

In order to exclude the impact of tax payments included in the price of products and paid from gross income, the calculation of the effect of operating leverage can be made using the following formula:

Where EOL is the effect of operating leverage;

∆GRP - growth rate of gross operating profit, in %;

∆CHOD - growth rate of net operating income.

There are other more complex modifications of the formula for calculating the effect of operating leverage. However, despite the differences in the algorithms for determining the effect of operating leverage, the content of the operating profit management mechanism by influencing the ratio of constants and variable costs enterprises remains unchanged.

In specific situations of the enterprise's operating activities, the manifestation of the operating leverage mechanism has a number of features that must be taken into account in the process of its use for profit management. The main of these features are listed below.

The positive impact of operating leverage begins to manifest itself only after the company has overcome the break-even point of its operating activities. In order for the positive effect of operating leverage to begin to manifest itself, the enterprise must first receive a sufficient amount contribution margin to cover their fixed operating costs (i.e. ensure equality: MP = Hypost). This is due to the fact that the company is obliged to reimburse its fixed operating costs, regardless of the specific volume of product sales, therefore, the higher the amount of fixed costs and the operating leverage ratio, the later, ceteris paribus, it will reach the break-even point of its activities.

After breaking the break-even point, the higher the operating leverage ratio, the greater the impact on profit growth will be the company, increasing the volume of sales. Those. at the same rate of growth in sales volume at an enterprise with a higher operating leverage ratio, the amount of operating profit increases at a higher rate after breaking the breakeven point than at an enterprise with a lower operating leverage ratio.

The greatest positive impact of operational leverage is achieved in a field as close as possible to the break-even point (after it has been overcome). As the volume of sales increases further and further away from the break-even point, the effect of operating leverage begins to decline. In other words, each subsequent percentage increase in the volume of sales of products will lead to an ever-lower rate of increase in the amount of operating profit.

The mechanism of operating leverage also has the opposite direction - with any decrease in the volume of sales of products, the size of gross operating profit will decrease even more. At the same time, the proportions of such a decrease depend on the value of the operating leverage ratio: the higher this value, the faster the amount of gross operating profit will decrease in relation to the rate of decline in sales volume.

The effect of operating leverage is stable only in the short term. This is determined by the fact that operating costs, which are classified as fixed, remain unchanged only for a short period of time. As soon as in the process of increasing the volume of sales of products there is another jump in the amount of fixed operating costs, the company needs to overcome a new break-even point or adapt its operating activities to it.

Understanding the mechanism of manifestation of operating leverage allows you to purposefully manage the ratio of fixed and variable costs in order to increase the efficiency of operating activities. This control comes down to changing the value of the operating leverage ratio under various market trends commodity market and stages life cycle enterprises.

Operating leverage can be managed by influencing both fixed and variable operating costs.

When managing fixed costs, it should be borne in mind that their high level is largely determined by the industry specifics of the implementation of operating activities, which determine the different level of capital intensity of manufactured products, the differentiation of the level of mechanization and automation of labor. In addition, it should be noted that fixed costs are less amenable to rapid change, so enterprises with a high operating leverage ratio lose flexibility in managing their costs.

Each enterprise has enough opportunities to reduce, if necessary, the amount and proportion of fixed operating costs. Such reserves include a significant reduction in overhead costs (management costs) in case of unfavorable commodity market conditions; sale of part of unused equipment and intangible assets in order to reduce the flow of depreciation charges; widespread use of short-term forms of leasing machinery and equipment instead of acquiring them as property; reduction in the number of consumed utilities and some others.

When managing variable costs, the main guideline should be to ensure their constant savings, because. between the sum of these costs and the volume of production and sales of products there is a direct relationship. The main reserves for saving variable costs include a decrease in the number of employees in the main and auxiliary industries by ensuring the growth of their labor productivity; reduction in the size of stocks of raw materials, materials, finished products during periods of unfavorable commodity market conditions; provision of favorable conditions for the supply of raw materials and materials for the enterprise, and others.

Purposeful management of fixed and variable costs, prompt change in their ratio under changing business conditions can increase the potential for the formation of the operating profit of the enterprise.

Financial leverage

One of the main tasks of financial management is to maximize the level of return on equity for a given level of financial risk. This problem can be solved in different ways. One of such ways to solve this problem is financial leverage.

Financial leverage characterizes the use of borrowed funds by an enterprise, which affects the change in the return on equity ratio. In other words, financial leverage is an objective factor that arises with the advent of borrowed funds in the amount of capital used by the enterprise, allowing it to receive additional profit on equity.

An indicator that reflects the level of additionally generated profit from equity with a different share of the use of borrowed funds is called the "Effect of financial leverage". It is calculated using the following formula:

EFL \u003d (1 - Snp) × (KVRa - PC) × (ZK / SK),

where EFL is the effect of financial leverage;

Snp - income tax rate, expressed as a decimal fraction;

КВРа - coefficient of gross profitability of assets (the ratio of gross profit to the average value of assets);

PC - the average amount of interest on a loan paid by the enterprise for the use of borrowed capital,%;

ZK - the average amount of borrowed capital used by the enterprise;

SC - the average amount of equity capital of the enterprise.

To understand how the effect of financial leverage is formed, consider an example where each of the three enterprises uses a different capital structure. Enterprise A - equity - 1000 units, no borrowed capital; enterprise B uses 800 units. own capital and 200 units. loan; enterprise B uses half of its equity and half of debt (500:500).

Considering the given data, one can see that there is no effect of financial leverage for enterprise A, since it does not use borrowed capital in its activities. For company B, this effect is:

EFL \u003d (1 - 0.3) × (20-10) × (200 / 800) \u003d 1.75

Accordingly, for enterprise B, this effect is:

EFL = (1 - 0.3) × (20-10) × (500 / 500) = 7.00

From the results of the calculations it can be seen that the higher the share of borrowed funds in the total amount of capital used by the enterprise, the greater the level of profit it receives on its own capital.

Table 5.1

Formation of the effect of financial leverage

	Indicators	Enterprises
	Indicators
	The average amount of all used capital (assets) in the period under review, of which:
	Average amount of equity
	Average amount of borrowed capital
	Gross profit amount (excluding loan interest costs)
	Return on assets ratio (without taking into account the cost of paying interest on a loan), %
	Average interest rate for a loan, %
	The amount of interest on the loan paid for the use of borrowed capital (column 3 × colum 6 / 100)
	The amount of gross profit, taking into account the cost of paying interest on the loan (column 4 - colum 7)
	Income tax rate expressed as a decimal fraction
	The amount of income tax (column 8 × colum 9)
	The amount of net profit remaining at the disposal of the enterprise after paying tax (column 8 - colum 10)
	Return on equity ratio or financial profitability ratio, % (group 11 × 100 / group 2)
	Increase in return on equity due to the use of borrowed capital, in % (in relation to prev A)

The financial leverage differential is the main condition that forms the positive effect of financial leverage. This effect appears only if the level of gross profit generated by the assets of the enterprise exceeds the average interest rate for the loan used (including not only its direct rate, but also other unit costs on its attraction, insurance and maintenance). The higher the positive value of the financial leverage differential, the higher, other things being equal, its effect will be.

Components of the effect of financial leverage:

the differential is the difference between the return on assets and the interest rate on loan i;

financial leverage - the ratio between borrowed funds and own funds; characterizes the strength of the impact of financial leverage.

Based on these positions, we can derive the financing rule, which can be represented as follows: if attracting additional borrowed funds gives a positive effect of financial leverage, then such borrowing is profitable, but it is necessary to monitor the differential, since with an increase in the leverage of financial leverage, creditors tend to compensate for the risk by raising the interest rate on the loan. The differential reflects the lender's risk: the larger it is, the lower the risk. The differential should not be negative, and the effect of financial leverage should optimally be equal to 30-50% of the return on assets.

Knowledge of the mechanism of the impact of financial leverage on the level of return on equity and the level of financial risk allows you to purposefully manage both the cost and the capital structure of the enterprise.

Bibliography

Blank I.A. Fundamentals of financial management. In 2 volumes - 2nd ed., revised. and additional - Kyiv: Elga, Nika-Center, 2004.

Blank I.A. Encyclopedia of financial manager. Issue. 1: Conceptual foundations of financial management. - Kyiv: Elga, Nika-Center, 2004.

Blank I.A. Encyclopedia of financial manager. Issue. 2: Asset and capital management of the enterprise. - Kyiv: Elga, Nika-Center, 2004.

Workshop on audit and financial management: Proc. allowance / A.E. Suglobov, V.V. Nitetsky, T.A. Kozenkov. - M.: KNORUS, 2007.

Balabanov I.T. Fundamentals of financial management: Proc. allowance. - 3rd ed., revised. and additional - M.: Finance and statistics, 2001.

Stanislavchik E.N. Fundamentals of financial management. - M.: Os-89, 2001.

Financial leverage characterizes the use of borrowed funds by the enterprise, which affect the measurement of the return on equity ratio. Financial leverage is an objective factor that arises with the advent of borrowed funds in the amount of capital used by the enterprise, allowing it to receive additional profit on equity. The formation of financial leverage is presented in "Fig 1":

“Fig.1. The structure of the formation of financial leverage»

Financial leverage allows us to distinguish three main components in it:

1. Financial leverage tax corrector (1-Snp), which shows the extent to which the effect of financial leverage is manifested due to different levels of income taxation.

The tax corrector can be used in the following cases:

a) if differentiated profit tax rates are established for various types of activities of the enterprise;

b) if for certain types of activities the enterprise uses tax incentives by profit;

c) if individual subsidiaries of the enterprise operate in the free economic zones of their country, where there is a preferential regime for profit taxation;

d) if individual subsidiaries of the enterprise operate in states with a lower level of income taxation

2. Financial leverage differential (KVRa-PK), which characterizes the difference between the gross return on assets and the average interest rate for a loan. The financial leverage differential is the main condition that forms the positive effect of financial leverage. This effect appears only if the level of gross profit generated by the assets of the enterprise exceeds the average interest rate for the loan used. The higher the positive value of the financial leverage differential, the higher, other things being equal, its effect will be.

3. The coefficient of financial leverage (LC / CK), which characterizes the amount of borrowed capital used by the enterprise, per unit of equity. The financial leverage ratio is that leverage (leverage in literal translation - leverage) that causes a positive or negative effect obtained due to its corresponding differential. With a positive value of the differential, any increase in the financial leverage ratio will cause an even greater increase in the return on equity ratio, and with negative value differential, the increase in the financial leverage ratio will lead to an even greater rate of decline in the return on equity ratio. In other words, an increase in the financial leverage ratio causes an even greater increase in its effect.

- Calculation of the financial leverage of the enterprise

Financial leverage is calculated as the ratio of the total advanced capital of the enterprise to equity capital:

Kfz \u003d ZK / SK, (3.5)

i.e. characterizes the ratio between borrowed and own capital. This indicator is one of the most important, since it is associated with the choice of the optimal structure of sources of funds.

EFL \u003d (1 - Snp) x (KVRa - PC) x ZK / SK, (3.6)

where EFL -- the effect of financial leverage, which consists in the increase in the return on equity,%; SNP -- income tax rate, expressed as a decimal fraction; KVRa -- gross return on assets (the ratio of gross profit to the average value of assets),%; PC - the average amount of interest on a loan paid by the enterprise for the use of borrowed capital,%; ZK - the average amount of borrowed capital used by the enterprise; SC -- the average amount of own capital of the enterprise.

Operating leverage

The concept of operating leverage is associated with the cost structure and, in particular, with the ratio between semi-fixed and semi-variable costs. Consideration of the cost structure in this aspect allows, firstly, to solve the problem of profit maximization due to the relative reduction of certain costs with an increase in the physical volume of sales, and, secondly, the division of costs into conditionally fixed and conditionally variable allows us to judge the payback costs and provides an opportunity to calculate the margin of financial strength of the enterprise in case of difficulties, complications in the market, thirdly, it makes it possible to calculate the critical sales volume that covers costs and ensures the break-even activity of the enterprise.

Calculations of the operating leverage ratio and the effect of operating leverage

The operating leverage ratio shows the strength of the operating leverage. It is calculated using the following formula:

K ol \u003d And post / And o (3.7)

Where And post is the sum of fixed operating costs. And o is the total amount of operating costs.

The effect is calculated using the following formula:

E ol \u003d? VOP /? OR, (3.8)

Where? GOP - the growth rate of gross operating profit in% ?OR - the growth rate of sales volume in%

Graph of the dependence of the amount of profit on the ratio of fixed and variable costs

The figure shows two enterprises that, with the same volume of the achieved amount of sales of products ( R f) have the same amount of costs (current costs) and the same amount of net income. However, enterprise A has a ratio of fixed and variable costs of 2:1, and enterprise B, respectively, 1:2. Due to the prevailing operating leverage (a high proportion of fixed costs in their total amount), enterprise A reaches the break-even point much later when selling products ( R tb), i.e. it needs to sell a much larger volume of output to reach this point than enterprise B.

At the same time, with a further increase in the volume of sales of products (after overcoming), enterprise A will receive a larger amount of profit per unit of output growth than enterprise B. This is due to the fact that due to fixed costs, their overall level to the volume of sales and net income at enterprise A will decrease to a greater extent (thus increasing the amount ceteris paribus).

Operating leverage (operating leverage, production leverage) - the ratio of fixed and variable costs of the company and the impact of this ratio on operating profit, that is, on earnings before interest and taxes. If the share of fixed costs is large, then the company has a high level of production leverage, while a small change in production volumes can lead to a significant change in operating profit.

The use of operating leverage allows you to manage the future profit from the sales of the enterprise by planning future revenue. The main factors that affect the volume of revenue are:

product price;
variable costs;
fixed costs.

Therefore, the goal of management becomes the optimization of variable and fixed costs, the regulation of pricing policy to increase sales profits.

The price operating leverage is calculated by the formula:

R c \u003d V / P R c \u003d (P + Z lane + Z post) / P \u003d 1 + Z lane / P + Z post / P

where
AT- sales revenue;
P- revenue from sales;
Z lane- variable costs;
Z post- fixed costs;
R c- price operating leverage;
R n- natural operating lever.

Natural operating leverage is calculated by the formula:

R n \u003d (B - Z lane) / P

Considering that V \u003d P + Z ln + Z post, we can write:

R n \u003d (P + Z post) / P \u003d 1 + Z post / P

Operating leverage is used by managers to balance different types of costs and, accordingly, increase income.

Operating leverage makes it possible to increase profits when the ratio of variable and fixed costs changes.

Tasks that are solved with the help of operational leverage:

calculation of the financial result for the organization as a whole, as well as for types of products, works or services based on the “costs - volume - profit” scheme;
determination of the critical point of production and its use in the adoption management decisions and setting prices for works;
making decisions on additional orders (the answer to the question: will an additional order lead to an increase in fixed costs?);
making a decision to stop the production of goods or the provision of services (if the price falls below the level of variable costs);
solving the problem of profit maximization due to the relative reduction of fixed costs;
the use of the threshold in the development of production programs, setting prices for goods, works or services.

M.S. Vlasov,

Associate Professor of the Department of Finance and Crisis Management
International Banking Institute,
St. Petersburg
L.Yu. Laskin,
candidate economic sciences,
Associate Professor of the Department of Economics and Finance
Institute of Refrigeration and Biotechnology
St. Petersburg National Research
university information technologies, mechanics and optics
Financial Analytics: Problems and Solutions
№40(226) 2014

The global financial and economic crisis, which has been developing since 2008 and has become acute in recent years, additionally made its own adjustments not only to the relationship between economic entities, but also became the reason for the aggravation of social, economic and organizational problems, as well as the suspension of investments in the expansion of production. As a result, the development of methods and models that would not only take into account production, financial and tax risks, but would also allow them to be leveled, is the main condition for the development of entrepreneurial activity in Russia. Therefore, the topic of the article is of certain scientific and practical interest.

The purpose of the study is to develop methods for assessing tax leverage and identifying its analogy with known types of leverage - operational and financial. The subject of the study are different types of leverage.

To assess operational, financial and tax risk, it is proposed to use operational, financial and tax leverage, respectively. Given them Comparative characteristics from the standpoint of the interpretation of cost coverage, through the ratio various kinds profit and through the ratio of fixed costs and profits. The revealed analogy between all types of leverage when using different methods for their assessment led to comparable results, i.e. all types of leverage decreased, which indicates an increase in the stability of the enterprise.

Thus, the practical significance of the work lies in the fact that all types of leverage are associated with the stability of the enterprise and allow you to determine the acceptable level of risk.

AT modern conditions development of the world economy and the political processes taking place in the world, ensuring the security of Russia, including economic security, is of particular importance. One of the tasks that is being solved in these conditions is to ensure stability and the necessary economic growth in the economy as a whole, and enterprises of all forms of ownership in particular.

More recently, in his message Federal Assembly The President of Russia identified the main priorities for the development of the economy, which should be aimed at creating conditions for increasing its efficiency and competitiveness, long-term sustainable development, to improve the investment climate, to achieve concrete results. The concept of long-term socio-economic development Russian Federation for the period up to 2020, approved by Decree of the Government of the Russian Federation of November 17, 2008 No. 1662-r (hereinafter referred to as the Concept), will allow economic agents to determine benchmarks for the coming years.

In particular, paragraph 4 of the Concept "Directions for the transition to an innovative socially oriented type of economic development" provides for the implementation of the second direction - the creation of a highly competitive institutional environment that stimulates entrepreneurial activity and attracting capital to the economy, including:

refusal to increase the total tax burden in the economy and reduce the costs associated with the fulfillment of obligations to pay taxes;
reducing investment and business risks by protecting property rights and increasing predictability economic policy state, ensuring macroeconomic stability, development financial institutions;
improving the conditions for organizations to access long-term financial resources, development financial markets and other institutions that ensure the transformation of savings into capital.

This indicates that the conditions for the development of entrepreneurial activity are a priority for the state for the coming years, as a result of which it is necessary to develop methods and models that not only take into account risks, but also allow them to be leveled. Under these conditions, it is very important that the owners and top managers of the company pursue a common goal - maximizing its value, including by optimizing taxation in order to stimulate and expand activities.

Of the available methods and models for assessing entrepreneurial risk, the most obvious is the category of "leverage", which allows assessing the risk of a company from the standpoint of various types of activities. A special place is given to operational leverage, which allows to assess the most significant production risk of the enterprise. Financial leverage, reflecting the "source aspect" of the company's activities, allows you to assess the financial risk of the company. Tax risk is proposed to be considered from the position of tax leverage, which covers the entire range of operating and financial activities company, therefore, reflects both operational and financial risks. This approach is more than obvious, since taxes levied on the territory of the Russian Federation can be included in the cost of production (resource payments, contributions to off-budget funds), relate to financial results operations and profit before tax.

The issue of analysis and evaluation of operational leverage was dealt with by such Russian economists as I.A. Blank, L.N. Bulgakov, V.V. Kovalev, M.N. Kreinina, E.S. Stoyanova, V.S. Stupakov, G.S. Tokarenko. A significant contribution was made by foreign scientists J. Dran, R. Lord, R. Long, W. McDaniel, T. O'Brien, P. Vanderheyden. Theoretical and methodological problems of financial leverage, its determinants and methods of measurement were given considerable attention in their studies. V. Bocharov, V. V. Kovalev, E. S. Stoyanova, I. A. Blank, S. Aktar, B. Oliver, M. Ferry, W. Jones, J. Gandhi, M. Audit, D. Scott , J. Martin, M. Singania, A. Seth et al. The concept of "tax leverage" in domestic and foreign literature practically does not occur. Only some researchers who identified the problem can be noted (M.A. Limitovsky, L.Yu. Filobokova , L.V. Samkhanova), so the study of tax leverage seems to be a rather necessary issue.

Operational leverage is a rather complex and multifaceted category used in financial management as a characteristic of production risk. The concept of operating leverage and its measure - the level of operating leverage DOL - are present in almost every foreign textbook on finance. The literature review regarding DOL is varied and characterized by uncertainties and controversy. So, J. Clark, M. Clark and P. Elgers argue that operating leverage measures the sensitivity (elasticity) of profit to changes in sales volume and changes directly with the ratio of fixed costs to full costs. A similar opinion is shared by E. Solomon and J. Pringle, who argue that the higher the firm's ratio of fixed operating costs to variable operating costs, the higher its operating leverage. Several publications make similar statements: "... this alternative (production) will entail a more capital-intensive production process, which will cause an increase in the level of operating leverage" .

In the domestic theory, there is still no clear interpretation of the term "operating leverage", there is no well-established opinion regarding the valuation measure. Thus, the Big Economic Encyclopedic Dictionary gives the following definition: “operating leverage is the share of operating costs in the total costs of production”, which is, in fact, a tautology. This is explained by the essence of operating costs, which are understood as the costs associated with the implementation of operating (current activities), i.e. costs associated with the production and sale of products.

Note that the majority of Russian scientists do not welcome foreign borrowings, therefore, in their teaching aids they use the term "lever". More details about the relationship between the two terms are given in the textbooks of V.V. Kovalev.

The vast majority of domestic economists consider operating leverage as a profit sensitivity factor due to changes in sales proceeds.

The level of operational leverage, being a tool for operational analysis and production risk assessment, has feedback with a margin of financial safety: with an increase in the margin of financial safety, the level of operating leverage decreases, and vice versa. It is traditionally believed that the financial safety margin should be more than 10%, therefore, the operating leverage should be limited to 10, in this case, the production risk, according to the authors, is acceptable, i. DOL add \u003d 1 / 0.1 \u003d 10.

The values of acceptable and optimal operating leverage can be used to determine the area of risk. As a rule, in theory it is proposed to single out three areas of risk: small, tolerable, and critical. The criterion for classifying an enterprise as a critical risk area, in the opinion of the authors, will be the situation when the level of operating leverage reaches a value above 10, acceptable risk - in the range from 3.3 to 10, and low risk if the level of operating leverage is in the range from 1 up to 3.3 1 .

1 DOL = 1 follows from the well-known formula DOL = 1 + F / EBIT , where EBIT is operating income, F is fixed costs. In the absence of fixed costs or profits, the operating leverage level is 1.

Another measure of operating leverage, which is practically unknown in Russian theory, is the relationship between operating leverage and break-even volume (proposed by the American researcher J. Dran). It is defined as the ratio of the break-even coverage ratio 2 (break-even coverage) to the break-even coverage ratio, minus one:

DOL = q / (q - 1). (one)

From the equation, it becomes apparent that DOL is defined simply as the firm's sales volume relative to break-even volume, and not necessarily just the ratio between fixed and variable costs.

2 Defined as the ratio of the actual volume products sold to the breakeven volume Q K .

financial leverage. In modern literature on financial management, the interpretation of the category "financial leverage" is also rather ambiguous. In general, financial leverage is associated with the attraction of borrowed sources of the firm. We can say that financial leverage is a tool with which you can influence the company's net profit, regulate the ratio between equity and borrowed capital to maximize the return on equity.

By raising borrowed funds, the company undertakes to repay the principal amount of the debt and pay interest for the use of funds at a certain time. Thus, financial leverage indicates the company's financial dependence on creditors, and the higher the share of borrowed capital in the total amount of funding sources, the higher the financial risk. In turn, financial risk, according to V.V. Kovalev, is expressed in an increase in the probability of non-payment of obligatory interest expenses as payment for the received financial resources.

There are several ways to evaluate financial leverage. The most obvious and easily interpretable measure is the ratio of debt and equity capital of the company, i.е.

K FL = ZK / SK, (2)

where ZK - the amount of borrowed capital, den. units;
SC - the value of equity capital, den. units

In domestic literature, this indicator is called by some authors the financial leverage ratio, or the leverage of financial leverage. The financial leverage ratio reflects the firm's capital structure and the degree of its debt to creditors. This measure is determined, as a rule, based on the data of the balance sheet. In the economic literature, it is proposed to evaluate financial leverage also based on market valuations.

Another more common measure for assessing financial leverage is its DFL level, which characterizes how many times profit before interest and taxes is more than taxable. Calculated according to the formula

DFL = EBIT / (EBIT – In), (3)

where DFL is the level of financial leverage;
EBIT - earnings before interest and taxes (operating income);
In - interest on loans and borrowings.

It is easy to see that in the absence of borrowed funds, DFL = 1. Note that the financial leverage ratio is directly related to the level of financial leverage - with an increase in the amount of borrowed capital, the financial costs of debt servicing increase, which, in turn, leads to an increase in DFL.

Financial leverage has a direct relationship with financial risk and an inverse relationship with financial stability. Among the financial stability ratios there are indicators that reflect the coverage of fixed financial costs. The interest coverage ratio (ICR 3) is the most widespread.

3 A synonym for ICR is the indicator TIE - times interest earned, which is widely used abroad.

In the standard version, the ratio is defined as the ratio of earnings before interest on loans and taxes EBIT to the annual amount of interest payable In:

ICR = EBIT / In. (four)

The standard interest coverage ratio measures a firm's ability to bear interest costs. The coefficient value must be greater than 1; if ICR = 1, this indicates that the company received a profit in the amount equal to the amount of interest on loans and borrowings to pay interest. If the coefficient is less than 1, then the company will not be able to fully pay off current liabilities with creditors.

The level of financial leverage and the interest coverage ratio have an inverse relationship, which was shown in the work:

DFL = ICR / (ICR - 1). (5)

Using the synthetic rating of the company and the identified relationship between the interest coverage ratio and the level of financial leverage, it was found in the work that the minimum financial risk for large companies will be if the level of financial leverage is less than 1.13, while for small companies it is less than 1.09.

tax leverage. As already noted, the concept of "tax leverage" practically does not occur in domestic and foreign literature. But to assess the impact of taxes paid on the performance of the company (income, profit), various methods are used. Yes, in normative documents and economic literature, evidence-based methods for analyzing the tax burden are given, which allow assessing the degree of influence of the volume of tax deductions on various indicators of a company's performance. Almost all methods are based on the calculation of various indicators of the company's performance, which differ from each other in the way the formalized calculation of the final indicator and the use of a different amount of taxes included in the calculation.

Among the whole variety of methods for assessing the tax burden, one can single out the main indicators that characterize the degree of influence of tax risk on financial and economic activity. However, we note that the concept of the tax burden is a basic concept - in scientific, educational, journalistic literature, such concepts as "tax burden", "tax pressure", "maximum level of taxation" are used, without their clear distinction and strict definition (for example, the concept "tax burden" is used by the Federal Tax Service of Russia, M. N. Kreinina, E. A. Kirova, M. I. Litvin, E. S. Vylkova and others, "tax burden" - by the Ministry of Finance of Russia, A. Kadushkin, N. Mikhailova and others, "tax stability" - by M. S. Vlasova, V. N. Nezamaikin, "tax loyalty" - by V. N. Nezamaikin, I. L. Yurzinova).

Modern approaches to the analysis of the tax burden in the general sense include:

calculation of the total tax burden, which characterizes the share of tax payments in the total income of the corporation, using the entire available arsenal of indicators;
analysis of the share of individual taxes paid in the total amount of tax payments paid by the corporation. According to this analysis, taxes are identified that make up the largest share in mandatory payments.

To implement the first approach, as well as a more detailed analysis of the economic condition of the enterprise, it is necessary to calculate the tax burden.

Thus, on the one hand, the tax burden is defined as the total amount of mandatory payments levied on legal and individuals, i.e. the total tax burden is measured in absolute terms, in monetary units. On the other hand, to assess the level of the tax burden, not absolute, but relative indicators of taxation in the form of the ratio of the amount of tax payments and fees to a certain basis are more applicable.

It is with the presence of a variety of approaches to the determination of relative indicators that enough a large number of these coefficients, which differ both in the number of taxes included in the calculation and in the basis. All researchers in this field are trying to solve a counter problem: some are trying to find a universal generalizing indicator of the tax burden that would cover the entire set of taxes, while others, on the contrary, are trying to determine the impact of specific taxes on the value of the tax base.

When comparing methods for analyzing the tax burden, it can be said with confidence that only one method should not be used, it is necessary A complex approach, and the analysis of indicators, calculated as the ratio of accrued and paid taxes to the performance indicator, makes it possible to identify tax risk . Currently, there are two diametrically opposed approaches to the concept of "tax risk". The first - on the part of the taxpayer - as an opportunity to offset losses as a result of making wrong decisions on the part of the company's management, as well as changes in the tax policy of the state. And the second approach on the part of the state, as the possibility of financial losses due to incomplete and late payment of taxes by taxpayers.

According to the authors, tax risk is the possible financial loss of a company as a result of a change in accounting policy for tax purposes. In any case, the tax risk, as well as the analysis of the tax burden, is a complex and multifaceted concept, on which the economic and financial security of an economic entity depends.

In turn, the tax burden is an indicator of the company's tax stability. Because economic entity taxes - the alienation of property in favor of the state, then paying them in a certain amount, enterprises of all forms of ownership should not lose stability. In this case, we are talking about tax stability, which is understood as stability that characterizes the level of the tax burden in its own sources of formation. working capital businesses needed to pay off tax liabilities. Obviously, tax sustainability is directly related to financial sustainability.

Also of particular interest is the tax elasticity indicator, which makes it possible to assess possible changes in the tax situation depending on the achieved increase in the value of the company:

E n \u003d ΔH / ΔV

where ΔН is the change in tax payments caused by the corresponding change during the restructuring, %;
ΔВ - change in the value of the factor affecting the tax, caused by a corresponding change in the company's activities, %.

The coefficient of elasticity in general terms characterizes the sensitivity of a change in one value when the factor changes by 1%. If we recall the essence of the concept of "lever", given by S.I. Ozhegov in explanatory dictionary Russian language, we note that a lever is a device that has a fulcrum and serves to balance a larger force with a smaller one, or a means by which you can initiate activity, put something into action. Therefore, the authors believe that an indicator that would take into account the impact of the tax burden on the performance of the company (meaning the indicator of tax stability) should have a nature similar to elasticity.

For the purposes of managing tax risks, we can suggest using the DNL "tax leverage" indicator, which is understood as a lever that allows you to manage net profit due to the variability of the tax burden:

DNL=(NP+T)/NP=EBT/NP,

where NP - net profit;
T is the total amount of corporate income tax.

In accordance with various approaches to assessing the tax burden of a company, it can be defined as the share of individual taxes in their total amount. And if we take into account the fact that the share of corporate income tax is disproportionately larger than the share of other taxes, then, according to the authors, they can be neglected. This explains why in the presented formula, instead of an indicator that takes into account the totality of taxes accrued by an organization, only one that reflects the amount of corporate income tax is used.

Given the high dependence of the “net profit” indicator on the size of the tax burden, the level of tax leverage is a coefficient that reflects the degree of tax risk due to the size of the tax exemption in the form of income tax, including due to the low degree of tax policy optimality.

A feature of this formula is that the numerator is the difference between the profit that the company would have at its disposal if it had not paid income tax, and the profit that really remained at its disposal after paying all taxes.

In comparison with operating and financial leverage, which can be considered from the position of covering the corresponding fixed costs (operating leverage - operating expenses, financial - financial expenses), tax leverage can be considered from the position of covering regular mandatory payments.

By analogy with financial leverage, we will introduce an indicator that would reflect the coverage of permanent obligatory regular payments (taxes) - the tax coverage ratio TCR (taxes coverage ratio). This ratio is defined as the ratio of pre-tax profit EBT to the annual amount subject to income tax T:

The tax coverage ratio measures the company's ability to bear the costs of tax payments. The coefficient value must be greater than 1. If TCR = 1, this indicates that the company has received a profit in the amount equal to the amount of accrued income tax. If TCR< 1, то сумма налога оказалась большей, чем прибыль.

The level of tax leverage and the TCR tax coverage ratio are inversely related, which can be demonstrated using a simple formula

Then there is a relationship between the tax coverage ratio and the level of tax leverage, i.e.

DNL = TCR / (TCR -1).

Thus, it is possible to draw an analogy between different types of leverage and see some uniformity of approaches to assessing their level (Table 1).

Table 1. Correlation between different types of leverage

Leverage	Leverage calculation			Characteristic	Risk
Leverage	from the position of interpretation of coverage	through the ratio of different types of profit	through the ratio of fixed costs and profits	Characteristic	Risk
Operating	DOL=q/(q-1) where q is the break-even coverage ratio (defined as the ratio of the actual volume of product sales to the break-even volume Q K)	DOL = Contr / EBIT = (EBIT + F) / EBIT where Contr - gross margin; EBIT - earnings before interest and taxes; F - fixed costs	DOL=1+F/EBIT	How many times the marginal income more profit before interest and taxes	Operating
Financial	DFL = ICR / (ICR - 1) where ICR is the interest coverage ratio	DFL 2 = EBIT / (EBIT - In) = (EBT + In) / EBT where EBT is profit before tax; In - the amount of interest for the use of borrowed capital	DFL 2 = 1 + In / EBT	How many times the income before interest and taxes is greater than the taxable base	Financial
Tax	DNL = TCR / (TCR -1) where TCR is the tax coverage ratio	DNL = EBT / (EBT - T) = (NP + T) / NP where NP - net profit; T - amount of taxes	DNL=1+T/NP	How many times is pre-tax profit greater than net income?	Tax

On the one hand, there is a similarity with the position of covering certain fixed costs - operating leverage can be expressed through covering operating expenses, i.e. through the breakeven coverage ratio. Financial leverage - through covering financial expenses (interest on loans and borrowings). Tax leverage - through the coverage of regular obligatory payments. In this case, not only similar terminology is used, but also identity is seen in the formulas.

On the other hand, from the standpoint of the ratio of various types of profit, the profit shown in the numerator of the formulas is greater than the denominator by the amount of fixed costs (production, financial and tax, respectively).

We will demonstrate the revealed analogy between the types of leverage using the example of EDEM LLC for 2011-2012. (Table 2).

Table 2. Estimated operating, financial and tax leverage of EDEM LLC for 2001-2012

Index	2011	2012
Sales proceeds, thousand rubles	12 567	15 025
Fixed costs, thousand rubles	1 735	1 998
Variable costs, thousand rubles	10 673,6	12 724
The volume of trade at the break-even point, thousand rubles.	11 520	13 050
Break even coverage ratio	1,09	1,15
Level of operating leverage (in terms of break-even coverage)	12,1	7,6
Profit before interest and taxes (operating profit), thousand rubles	158,3	302,9
Level of operating leverage (through the ratio of fixed costs and profits)	12,0	7,6
Interest payable (fixed financial expenses), thousand rubles	52	85
Level of financial leverage	1,5	1,39
Profit before taxation, thousand rubles	106,3	217,9
The level of financial leverage (through the ratio of the amount of taxes and profit)	1,5	1,39
Income tax, thousand rubles	74	41
Net profit, thousand rubles	32,3	176,9
Tax coverage ratio	1,44	5,31
tax leverage	3,29	1,23

EDEM LLC is a typical commercial organization wholesale trade, whose main activity is the trade in various types of fabrics produced in Korea, China and Indonesia, as well as knitted fabrics and related products. The company has achieved high results economic activity in 2012, as evidenced by the growth of profit before tax and net profit, which led to an increase in profitability indicators and indicates an increase in the competitiveness of the enterprise.

Thus, to assess operational, financial and tax risks, indicators of operational, financial and tax leverage were used, respectively, from different positions: from the standpoint of interpreting coverage, through the ratio of various types of profit, through the ratio of fixed costs and profit.

Based on the results of the performed calculations, the following conclusions can be drawn:

as a result of revenue growth by 1.19 times and an even greater increase in operating profit (by 1.9 times), operating leverage decreased by more than 1.5 times;
despite an increase in interest payable on loans and borrowings by 1.6 times, financial leverage also decreased due to an increase in operating profit;
given the feedback between financial leverage and financial stability, we can judge the increase in the latter;
an almost 4-fold increase in the tax coverage ratio characterizes the growth of the company's ability to pay tax expenses. This, in turn, led to a decrease in tax leverage by almost 3 times.

The proposed tax leverage assessment model, developed by analogy with the methods for assessing operational and financial leverage, generally shows the mechanism of action of all types of leverage (using the example of EDEM LLC). This model can be used in carrying out similar calculations to assess the relevant types of risks for other enterprises.

The revealed analogy between the considered types of leverage using the described methods for their assessment led to comparable results, i.e. all types of leverage decreased, which indicates the growth of the company's stability. Thus, all types of leverage are associated with the stability of the enterprise, as they allow you to determine the acceptable level of risk.

However, the lack of theoretical developments in the field of application of the tax coverage ratio, in contrast to the interest coverage ratio, does not allow one to unambiguously interpret the results obtained. The analysis, according to the authors, is an integral element of a comprehensive and systematic study of the company's activities and does not exclude its further deepening in the field of risk assessment and management and the sustainability of economic entities.

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