What is Operating Leverage and is it good or bad?

Q: What is the carryover ratio? What parameters of the base does its value depend on?

A: Carryover Ratio The purpose of measuring the carryover ratio  is to determine the ratio which are…

Q: What is the benefits and draw backs of long straddle strategy?

A: A long straddle is when the investor buys both a call and a put option on the same stock, with the…

Q: What does this statement mean? One type of leverage affects both EBIT and EPS. The other type…

A: Operating leverage is based on the cost structure of the company. It is the extent of fixed and…

Q: Define degree of operating leverage.

A: The degree of operating leverage (DOL) is a financial ratio that measures the sensitivity of a…

Q: Which would changes in leverage have no effect on FCFE or FCFF, explain your answer

A: Free cash flow to firm(FCFF) is the cash flow available to supplier of capital. Free cash flows to…

Q: Define the term leverage. And method of computing degree of leverage.

A: Financial Accounting:- The term financial accounting includes recording, summarizing and reporting…

Q: What is indifference curve?

A: Indifference curve: It is a diagram indicating a mix of two items that give equivalent fulfillment…

Q: What does ROI measure?

A: Return on Investment: Return on Investment is a profitability measure which determines a company's…

Q: Define degree of operating leverage (DOL)

A: Degree of Operating Leverage (DOL): Degree of Operating Leverage (DOL) is a ratio of leverage that…

Q: How does operating leverage affect business risk?

A: If an organization has high fixed expenses or cost, and if an organization experiences issues…

Q: What is NUBD’s degree of operating leverage?

A: Degree of operating leverage shows how operating income of the business will change as a, result of…

Q: What is a constraint?

A: Internal Control:   It refers to a set of rules, policies adopted by a business to ensure accuracy…

Q: Explain this statement: “Using leverage has both good and badeffects.”

A: Financial leverage is said to be made when company uses borrowed capital instead of own capital for…

Q: What is the difference between firm-commitment and stand-by underwriting? What is underwriting…

A: Underwriters play a very critical role in ensuring the fresh issue of securities of the company are…

Q: Define leverage

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: ?Which of the following statements about operating leverage is false

A: Operating leverage: Operating leverage can be defined as the measure used to identify the increase…

Q: Define operating leverage with examples and why it is potentially risky.?

A: Operating leverage is used to measure a company’s fixed costs as a percentage of its total costs. A…

Q: What is scalability?

A:

Q: Explain this statement: Using financial leverage has both good and bad effects.

A: financial leverage is the process of borrowing capital to make an investment, with the assurance…

Q: What is flexibility option?

A: A financial instrument that provides the opportunity to the buyer and seller to purchase and sell…

Q: Explain the parameters or situations used to determine if the operating and financial leverages are…

A: Operating leverage is based on the cost structure of the company. It is the extent of fixed and…

Q: “One type of leverage affects both EBIT and EPS. The other type affects onlyEPS.” Explain this…

A: Leverages mean leakage. Leverages word used in corporate for fixed cost because due to fixed cost…

Q: What is the meaning of operating leverage?

A: Leverage ratio: It overlooks the mixture of debt and equity which is required for analyzing the…

Q: What properties should transfer-pricing systems have?

A:

Q: How do you define leverage?

A: Solution:- Leverage means as follows under:-

Q: What is operating leverage?

A:

Q: What is Linda's degree of operating leverage?

A: Operating Cost is the efficiency ratio. It calculates the portion of the contribution covered by…

Q: What is the meaning of Resource Market?

A: In business terms, anything which acts as input and contributes to the production process refers to…

Q: What is operating leverage? Give three examples?

A: Operating leverage:

Q: What is financial leverage?

A: Capital Structure:   It refers to the combination of debt and equity that constitutes the finances…

Q: What is positional bargaining

A: Positional bargaining: Positional bargaining may be a negotiation tact including locking onto a set…

Q: HAT ARE THE TYPES OF LEVERAGE? HOW ARE THEY CALCULATED AND WHAT DO THEY IMPLY?

A: Leverage is the technique of risk evaluation in a business. There are three types of Leverage…

Q: What is hurdle rate?

A: Hurdle rate a rate usually used in capital budgeting decisions to calculate the acceptability of a…

Q: What does Security Market Line Capture?

A: Security market line (SML) is a straight line sloping upward depicting an expected rate of return as…

Q: What is meant by the term operating leverage?

A: Definition: Operating leverage: Operating leverage is an outcome of using fixed costs to obtain a…

Q: What is Nancy’s degree of operating leverage?

A: Formula used: Degree of operating leverage = contribution margin / Operating income