A company with a high operating leverage will experience

Question

Quizplus · Accepted Answer

A high operating leverage indicates that a significant portion of the total costs are fixed, meaning they do not vary with changes in sales volume. As a result, a small increase in sales can lead to a much larger increase in operating income, while a small decrease in sales can lead to a sizable decrease in operating income. This is because the fixed costs are spread over a larger or smaller revenue base, resulting in a more significant impact on profitability.

A Company with a High Operating Leverage Will Experience