The Impact of Financial Leverage on Earnings Before Tax, Empirical Assessment at Manufacturing Enterprises

Using the document research method, we have built a theoretical basis and assessed that the research situation of "the impact of financial leverage on pre-tax profits" in Vietnam has received little attention. Accordingly, documents related to financial leverage and pre-tax profits are synthesized and separated into necessary content and presented in the study. During the empirical evaluation process conducted at Vietnam's Vinamilk enterprise, we used the method of analyzing vertical and horizontal financial indicators. Results of analyzing secondary data from Vinamilk's annual financial statements in the period 2014-2022 show: that Vinamilk is a reputable enterprise in Vietnam and in the international market; The business's revenue and profits continue to grow even during difficult economic times due to the covid -19 epidemic; The corporate management board has applied financial leverage at an optimal level, resulting in the highest profit increase with the least cost. In addition, this enterprise's management board also applies financial leverage flexibly and uses leverage at a high level without affecting profits. From the results of this experimental evaluation, we have made two observations. First, using financial leverage requires careful evaluation and consideration. Second, using high or low financial leverage must be flexible and based on circumstances and economic market fluctuations.