What is the meaning of operating leverage?

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 operating leverage, and for what is it used?

A: Operating Leverage is a cost-accounting formula used to measure the growth of its operating income.…

Q: What is physical asset market?

A: Definition: The Market where tangible assets can be purchases, sold and liquidity in case of default…

Q: What is an operating segment?

A: Operating segment: It is defined as providing information about the business actives with an…

Q: Define degree of operating leverage.

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

Q: What are value drivers?

A: Answer: The basic determinants of the cash flows of a project or primary factors in project…

Q: Define Net realizable value.

A: Net realizable value is the expected cash to be received against a given asset.  Thus, Net…

Q: Explain the benefits of supply-chain analysis.

A: In supply chain analysis, every stage of a supply chain that includes the purchase of raw material,…

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: What is Operating Leverage and is it good or bad?

A: It can be characterized as how much a firm brings about a mix of fixed and variable expenses. In…

Q: How are gain contingencies recorded?

A: Introduction Gain Contigencies are the uncertain events that result in gain. The gain is purely…

Q: What is a key performance indicator?

A: Key Performance Indicator: Key performance indicator is the measurement metric used to evaluate the…

Q: What are the objectives of application controls?

A: An application control consists of compactness and validity checks, identification, authentication,…

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: 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 do the FCFE, corporate FCF valuation, and compressed APV models differ? How are they similar?

A: FCFE stands for free cash flow to equity, FCF indicates free cash flow to the firm and APV refers to…

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 are input flexibility options and output flexibility options?

A: The question is based on the concept of production process. The managers can use variation in Input…

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 are the advantages and disadvantages of  LIFO?

A: Last-in-First-Out: In Last-in-First Out method, the costs of last purchased items are considered as…

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 a transaction price?

A: Transaction price: It is the price of a service or a good which is expressed relative to the similar…

Q: Explain the effect of leverage on EPS and ROE and what is the break-even EBIT?

A: Leverage refers to the debt amount a company uses in order to finance its assets. EPS refers to…

Q: What is flexibility option?

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

Q: What is an Acquisition costs?

A:

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: How do you define leverage?

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

Q: What is operating leverage?

A:

Q: What is lead underwriter?

A: Underwriting is a process through which securities of company sale by third party in the market.…

Q: What is operating leverage? Give three examples?

A: Operating leverage:

Q: What are the levels of operations performance?

A: There are three levels of operations performance is as follows: Societal level: Social activity is…

Q: What is positional bargaining

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

Q: What does operating leverage measure, and how is it computed?

A: Operating leverage is a price metric that measures how much a firm or project can increase…

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

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…