All else being equal, a company with a high operating leverage will have

Question

Quizplus · Accepted Answer

Operating leverage is a measure of how revenue growth translates into growth in operating income. A high operating leverage means that a company has a higher proportion of fixed costs in relation to variable costs, leading to a higher contribution margin ratio. This is because as sales increase, the fixed costs are spread over more units, reducing the cost per unit and increasing the contribution margin per unit.

All Else Being Equal, a Company with a High Operating