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Gail and Company had the following sales and EBIT during the years 2007 through 2009.
2007
2008
2009
Sales ($ million)
75.2
82.7
95.1
EBIT ($ million)
26.3
30.5
36.0
a. Use the data provided to assess Gail and Company's operating leverage over the following periods (1) 2007-2008 (2) 2008-2009 (3) 2007-2009
b. Compare, contrast, and discuss the firm's operating leverage between the 2007-2008 period and the 2008-2009 period. Explain any differences.
c. Compare the operating leverage for the entire 2007-2009 period to the values found for the 2007-2008 and 2008-2009 periods and explain the differences.
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