Financial Management: Leverage and Cost Analysis

This lecture covers the concepts of leverage and cost analysis in financial management. It explains how leverage affects return on equity and return on capital employed. The presentation also delves into the cost structure of a company, including fixed, variable, and semi-variable costs. Through examples, it illustrates how to compute breakeven sales, perform sensitivity analyses, and determine the margin of safety. Additionally, it discusses operational risk versus operating leverage and provides insights into contribution margin income statements.