Define the following term using 1 or 2 complete sentences (not just key words). Operating Leverage

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Define the following term using 1 or 2 complete sentences (not just key words).
Operating Leverage
Transcribed Image Text:Define the following term using 1 or 2 complete sentences (not just key words). Operating Leverage
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Operating Leverage:

               Operating leverage is an accounting metric that assists analysts in analysing how a company's operations are related to the company's revenues; the ratio details how much operating profit increase the company will have with a specific percentage of sales increase - which emphasises sales predictability.

 

 

 

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