What is meant by ‘Operating Leverage’ and ‘Financial

Question

What is meant by ‘Operating Leverage’ and ‘Financial Leverage’?

18 May 2022

Answer :

Word Count : 235

Operating Leverage:

1. Operating leverage is the ability of the firm to use fixed operating costs to magnify the effects of changes in sales on its EBIT.

2. The leverage associated with investment or asset acquisition is called operating _________ ____ ______ ___ ___ _______.
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