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BRILLIANT’S Leverage Analysis 387

(b) {\$ŠñS> H$m°ñQ> (_m°{ZQ>ar Q>åg© _|) Ed§ (b) {\$ŠñS> H$m°ñQ>
(c) do[aE~c H$m°ñQ> (c) do[aE~b H$m°ñQ> Ed§
(d) ã`mO
3. \$m°_y©cm 1. Contribution = O.L 1. EBIT = F.L.
EBIT EBT
% change in EBIT % change in EPS
2. = DOL 2. = DFL
% change in Sales % change in EBIT
4. BpÝS>Ho$eZ Am°naoqQ>J crdaoO H$s {S>J«r Cg gr_m H$mo Xem©Vr \$m`Z|{e`c crdaoO H$m ñVa Cg gr_m H$mo
h¡ Ohm§ goëg _| àË`oH$ n[adV©Z Ho$ H$maU EBIT Xem©Vm h¡ O~ EBIT _| àË`oH$ n[adV©Z Ho$ H$maU
à^m{dV hmo gH$Vm h¡Ÿ& EPS à^m{dV hmo gH$Vm h¡Ÿ&

Q.44. What is operating risk and financial risk? Explain.
Am°naoqQ>J [añH$ VWm ’$m¶Z|{e¶b [añH$ ³¶m h¡? g‘PmB¶o&
OR
Explain the terms 'operating risk' and 'financial risk'.
'Am°naoqQ>J [añH$' VWm '’$m¶Z|{e¶b [añH$' eãXm| H$m dU©Z H$s{OE&

Operating Risk Am°naoqQ>J [añH$
Operating risk can be defined as the vari- Am°naoqQ>J [añH$ H$mo EBIT _| hmoZo dmbo n[adV©Z Ho$
ability of EBIT. It depends on the external and ê$n _| dU©Z {H$`m Om gH$Vm h¡Ÿ& `h Cg na {Z^©a hmoVr h¡
internal environment in which firm is operat- {Og_| \$_© H$m`© H$aVr h¡Ÿ& Am°naoqQ>J [añH$ H$mo AZXoIm
ing. Operating risk is an unavoidable risk. If a
firm can predict about operating risk, it can be Zht {H$`m Om gH$VmŸ& `{X H$moB© \$_© Am°naoqQ>J [añH$ H$m
a better condition to face it. nydm©Zw_mZ bJm gHo$ Vmo dh BgH$m gm_Zm H$a gH$Vr h¡Ÿ&
There are two components of operating gm_mÝ`V… Am°naoqQ>J [añH$ Xmo àH$ma H$s hmoVr h¢…
risk:
(a) Variability of Sales: Variability of sales (a) {dH«$` _| n[adV©Z: {dH«$` _| n[adV©Z EH$ à_wI
revenue is a major operating risk. The sales of a Am°naoqQ>J [añH$ h¡Ÿ& {H$gr H$ånZr Ho$ {dH«$` _| d¥{Õ `m
company may fluctuate due to 3 reasons: H$_r Ho$ _w»`V… VrZ H$maU hmo gH$Vo h¢ …
(i) Change in general economic condition. (i) gm_mÝ` Am{W©H$ n[apñW{V`m| _| n[adV©ZŸ&
(ii) Due to certain reason, the sales of a par- (ii) {H$gr {d{eï> H$maU go {H$gr {d{eï> B§S>ñQ´>r Ho$ {dH«$`
ticular industry may decline like after in- _| n[adV©Z Am gH$Vm h¡ O¡go T.V. AmZo Ho$ ~mX
vention of T.V. there was a great decline in
demand of radio or the fixed phone con- ao{S>`mo H$s _m±J _| ^mar {JamdQ> hþB© `m _mo~mBb AmZo
nections rapidly declined after the inven- Ho$ ~mX ñWm`r \$moZ H$ZoŠeÝg VoOr go KQ>oŸ&
tion of mobiles.
(iii) Internal factors of a company may also (iii) H$ånZr Ho$ B§Q>Z©b \¡$ŠQ>g© O¡go, _¡ZoO_|Q> _| n[adV©Z,
affect the sales e.g. change in management, _mH}$qQ>J g§~§Yr {ZU©`, BÝdoñQ>_|Q> nm°{bgr Am{X go
marketing decisions, investment policy ^r {dH«$` à^m{dV hmoVm h¡Ÿ&
etc.