Article
EBIT-EPS ANALYSIS HYUNDAI LIMITED.HYDERABAD
Various analytical approaches are needed to find the ideal level of debt for the organization. Of them, capital structure ratio analysis methods get the most attention, including: Analysis of the company's capital structure using EBIT-EPS, coverage coefficients (ratios), and a set of so-called informal techniques of ratio analysis. Operating profit (EBIT) and profits per share (EPS) are disproportionately affected by the rise of debt, according to the study of financial leverage variables. Given the ability to visually and numerically represent such an analytical approach, the so-called operating profit - earnings per share analysis (EBIT - EPS analysis) was theoretically established in response to these effects. It includes study of the coverage point or financing indifference. For the visual representation, we need two points. The first one is derived from the formula for profits per share (EPS) multiplied by a certain amount of operational profit (EBIT). The amount of operational earnings (EBIT) needed to pay fixed expenditures for different financing options is the second point. Tabular or equation-based calculations are necessary for mathematical representations. Coverage (indifference) point determination and the two-way analytical approach of the so-called EBIT-EPS analysis are the goals of this study.
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