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

Operating leverage and financial leverage are two important concepts in finance and accounting that relate to a company's ability to generate profits and manage its costs.

Operating leverage refers to the degree to which a company's fixed costs contribute to its overall cost structure. In other words, it measures the impact of changes in revenue on a company's operating income. A company with high operating leverage has a larger proportion of fixed costs compared to variable costs. This means that small changes in revenue can have __________ ___ __________ _________ ____ _______ ___ ___ ___ __________ __________ _________.
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