The operating leverage is:

Question

Quizplus · Accepted Answer

Operating leverage is calculated as the percentage change in operating income divided by the percentage change in sales. A higher operating leverage indicates that a company has a higher proportion of fixed costs, which amplifies the effect of sales changes on operating income. The correct answer is typically determined by the specific financial data provided, which is not included here, but B) 3.00 is a common example of a moderate operating leverage ratio.

The Operating Leverage Is