What is the difference between financial leverage and combine leverage?

Financial leverage is associated with financing activities. use of fixed interest source of funds provides increased return on equity investment without additional requirement of funds from shareholders. While, combined leverage is the product of financial leverage and it measures the total risk of the firm.

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In a very brief wording and as subtracted from "Investopedia":

Financial leverage (DFL):

is the degree to which a company uses fixed-income securities such as debt and preferred equity. The more debt financing a company uses, the higher its financial leverage. A high degree of financial leverage means high interest payments, which negatively affect the company's bottom-line earnings per share. 

Whereas, The Combine Leverage (DCL) is:

 is the leverage ratio that sums up the combined effect of the Degree of Operating Leverage (DOL) and the Degree of Financial Leverage (DFL) has on the Earning per share or EPS given a particular change in shares. This ratio helps in ascertaining the best possible financial and operational leverage that is to be used in any firm or business.

Financial leverage magnifies how earnings per share (EPS) change as a response to changes in EBIT where the fixed cost is that of financing, specifically interest costs. Operating leverage measures the extent to which a company or specific project requires some aggregate of both fixed and variable costs

Financial lerage is basically the use of third-part capital.

Combine leverage, as the name suggests, is the use of non-tangible resources, opperational advantage and other strategic resources (most temporary). The term is being used in tech industry.

Financial Leverage (or leveraging) means using debt, or any debt-related instruments to acquire additional assets. From a Capital Markets standpoint, it is directly correlated to the company EPS (Earnings per Share) and determines the growth or value potential, and whether or not the company is "reasonably leveraged" (by reasonably, I mean it can sustain income to pay off the debt and whatever interest rate it has while maintaining gross profit margin to sustain business operations and growth potential).

Combine Leverage (Degree of Combined Leverage) is the leverage ratio to measure the combined effect of the Degree of Operating leverage and (DOL) and Degree of Financial Leverage has on a company's EPS. The term is often used in forecasting or analysis reports, especially if there are expected change in company's income flow or sales.

Financial Leverage explains the Earning Per Shares and used to acquire additional assets and evaluates the interest elements.

Combine Leverage is a ratio that summarizes the combined effect that the operating leverage and financial leverage have on EPS given a particular change in sales.

financial leverage

evaluates the effect of interest expenses.

combination of the two leverages

. financial and opertaing  which means

measures the effect of fixed cost

degree of combined leverage (DCL) is a leverage ratio that summarizes the combined effect that the degree of operating leverage (DOL) and the degree of financial leverage have on earnings per share (EPS), given a particular change in sales. This ratio can be used to help determine the most optimal level of financial and operating leverage to use in any firm.

BREAKING DOWN 'Degree Of Combined Leverage - DCL'

For illustration, the formula is:

Degree Of Combined Leverage (DCL)

Degree of Financial Leverage

The degree of financial leverage is calculated by dividing the percentage change in a company's EPS by its percentage change in EBIT. The ratio indicates how a company's EPS is affected by percentage changes in its EBIT. A higher degree of financial leverage means that the company has more volatile EPS.

Financial leverage magnifies how earnings per share( EPS) changes as a response to changes  in     EBIT where the fixed cost is that of financing,specifically interest costs.

*Combine leverage IS a leverage which refers to high profits due to fixed costs.

*It includes fixed operating expenses with fixed financial expenses.,also includes leverage benefits and risks which are in fixed quantity

In general, leverage means affect of one variable over another, In financial management, leverage is not much different, it means change in one element, results in change in profit. It implies, making use of such asset or source of funds like debentures for which the company has to pay fixed cost or financial charges, to get more return. There are three measures of Leverage i.e. operating leverage, financial leverage, and combined leverage. The Combine leverage measures the effect of fixed cost whereas the financial leverage evaluates the effect of interest expenses.