Miller's Dairy Products reported sales of $1.5 million in 2002 and $2.25 million in 2003. Their EBIT in 2002 was $550,000 and in 2003 the EBIT rose to $925,000. What is the company's operating leverage?

Name: Miller's Dairy Products reported sales of $1.5 million in 2002 and $2.25 million in 2003. Their EBIT in 2002 was $550,000 and in 2003 the EBIT rose to $925,000. What is the company's operating leverage?
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Question

Quizplus · Accepted Answer

OL = {(925-550)/550}/{(2.25-1.5)/1.5} = 1.36

Miller's Dairy Products Reported Sales of $1