Explanation of Operating Leverage

Operating Leverage defines that it a kind of leverage ratio shortening the result a exacting quantity of operating leverage has on a company’s earnings before interest and taxes (EBIT). Operating leverage defines engage uses a great amount of permanent costs to variable costs in the operations of the firm.

Operating Leverage and Degree of Operating Leverage (DOL)

Sana Ahmed Volume Profit CVP Relationship

Definition and Explanation of Operating Leverage: A lever is a tool for multiplying force. Using a lever, a massive object can be moved with only a modest amount of force. In Business, operating leverage serves a similar purpose. Operating leverage is a measure of