Operating leverage, Financial Management

Operating Leverage

Operating leverage define the degree to which an organization cost of operation is fixed as opposed to variable. Therefore, it is a measure of how much a firm's profits can be expected to change when sales rise. Firms with a high degree of operating leverage will experience greater changes in profitability when sales change. Mostly, organization with high operating leverage will maintain low levels of debt, or financial leverage.

Posted Date: 10/17/2012 1:30:59 AM | Location : United States







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