Operating Leverage Definition:

Operating leverage is a measure of how sensitive net income is to a given percentage change in sales. It is computed by dividing the contribution margin by net income.

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Relevant Terms:

• Negative and Positive Operating Leverage
• Positive financial leverage
• Negative financial leverage

Other Related Accounting Articles:

• Positive and Negative Operating Leverage Definition
• Positive Financial Leverage Definition
• Negative Financial Leverage Definition
• Degree of Operating Leverage Definition
• Introduction to Managerial Accounting
• Contribution Margin Definition
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• Accounting Principles and Accounting Equation
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