A company has a degree of operating leverage of 4.0. If operating profit increases by 3%, what is the percentage change in sales?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 6P
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Please provide the answer to this general accounting question using the right approach.

A company has a degree of operating
leverage of 4.0. If operating profit
increases by 3%, what is the percentage
change in sales?
Transcribed Image Text:A company has a degree of operating leverage of 4.0. If operating profit increases by 3%, what is the percentage change in sales?
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