Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Illustrate the Operating Leverage?
Operating Leverage: - The operating leverage perhaps defined as the tendency of the operating profit to differ disproportional with sales. It is said to survive when a firm has to pay fixed cost regardless of volume of output or sales. The firm is supposed to have a high degree of operating leverage if it employs a greater amount of fixed cost and a smaller amount of variable cost. Alternatively a firm will have a low operating leverage when it employs a greater amount of variable cost as well as a smaller amount of fixed cost. Therefore the degree of operating leverage depends upon the amount of fixed element in the cost structure.
Operating leverage in the company is a function of three factors:-
(a) The amount of fixed cost
(b) The contribution margin
(c) The volume of sales
Formulae:-
Operating leverage = Contribution / Operating profit or C/OP
Utility: - The operating leverage point outs the impact of change in sales on operating income. If a firm has a elevated degree of operating leverage small changes in sales will have large effect on operating income. Alternatively the operating profit (EBIT) of such firm will rise at a faster rate than the increase in sales.
Likewise the operating profit of such a firm will suffer a great loss as compared to reduction in its sales.
Which formula would you use to solve for the payment needed for a car loan if you know the interest rate, length of the loan, and the borrowed amount? Describe. To solve for k
Explain the Difference between cash and profit Cash flow statement shows all the cash in and cash out for the organisation for that period. It demonstrates the cash generating
What level of profits can you earn in a perfectly competitive market and what drives markets towards perfect competition over the long run?
Assume Main Street Store’s Net Sales in 2010 were $1,000,000 and it’s Net Income in 2010 was $17,000. Thus, between 2010 and 2011 Main Street Store’s net sales increased 20%. Durin
I am looking for assignment help on the topic FOREX. It would be great if anyone help me.
What is the nature of a concessionary loan and how is it handled in the APV model? A concessionary loan is a loan that is provided by a governmental body at below the normal ma
What are the assumptions of MM(Modigliani Miller) approach?
Significance of cost of capital
External Financing with Same Cost of Capital and Same Proportions as Existing: If a firm raises new capital funds in the same proportion as at present and at the same specific cos
How are financial trades made in an over-the-counter market? Discuss the role of a dealer in the OTC market. In difference to the organized exchanges, which have physical locat
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd