Question 1. True or false. why? Operating leverage is used as a measure of the sensitivity...

Question 1. True or false. why?

Operating leverage is used as a measure of the sensitivity of profits to changes in sales.

High operating leverage results in low volatility of profits

High degree of operating leverage provides significantly higher profits when sales are increasing.

Companies with higher proportion of fixed costs in their cost structure tend to have higher degrees of operating leverage.

Management of companies can sometimes influence its degree of operating leverage.

McDonald’s is likely have a higher degree of operating leverage than Volkswagen.

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I try to clear all the points but still if you have any doubt please come back to me.

ekkarill92 answered 1 year ago

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