Define the following term using 1 or 2 complete sentences (not just key words). Operating Leverage
Define the following term using 1 or 2 complete sentences (not just key words). Operating Leverage
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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