Does high operating leverage always mean high business risk, Financial Management

Assignment Help:

Does high operating leverage always mean high business risk?  Explain.

High operating leverage does not all the time mean high business risk.  If the companies sales are quite stable after that the variation in operating income would be small even if the degree of operating leverage were large. 


Related Discussions:- Does high operating leverage always mean high business risk

Financial analysis task force, Task I am sure you are aware that the c...

Task I am sure you are aware that the corporate annual meeting is coming up soon. As part of the Treasurer's presentation, I have been asked to propose a Special Capital Requi

Working capital, 5 Define risk. Examine the need for assessing the risks in...

5 Define risk. Examine the need for assessing the risks in a project.

Valuation methods, Valuation Methods: 2 - Year Method Perpetual ...

Valuation Methods: 2 - Year Method Perpetual Growth Method Constant Growth Method Zero Growth Method Growth Phases Valuation Model:  'Constant Growth Met

Price volatility characteristic of bond with embedded option, The price of ...

The price of the embedded option comprises two components. The first is the value of the same bond assuming it has no embedded option (option-free bond), th

Foreign exchange market equilibrium, Foreign Exchange Market Equilibrium: ...

Foreign Exchange Market Equilibrium: We say that the foreign exchange market is in equilibrium when deposits of all currencies o er the same expected rate of return (when retu

What is the requirement of working capital, Q. What is the requirement of W...

Q. What is the requirement of Working Capital? Ans. Meaning of Working Capital: - Working capital management is a significant aspect of financial management. In business money

Calculation of npv of blackwater plc, BLACKWATER PLC (a) Calculation o...

BLACKWATER PLC (a) Calculation of NPV EV = (0.3 × 0.50) + (0.5 × 1.40) + (0.2 × 2.0)    = 0.15 + 0.70 + 0.40 = 1.25 (i.e.) $ 1.25m To conclude the NPV of the project

Types of financial incentive schemes, Types of financial incentive schemes ...

Types of financial incentive schemes Performance associated pay (PRP) systems e.g. piecework or sales commission Bonuses e.g. supplementary payments for targets or ai

Non-interest rate indexes, Generally, an interest rate or an interest...

Generally, an interest rate or an interest rate index is used as a reference rate for However, through financial engineering, issuers have been able to construct

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd