Answered: Explain the difference between…

Explain the difference between operating gearing and financial gearing. Identify one likely implication to a company with a high level of gearing.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 12Q: Define operating leverage and explain its importance to a company and how it relates to risk.

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Explain the difference between operating gearing and financial gearing. Identify one likely implication to a company with a high level of gearing.

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