Financial leverage is typically more under the control of management than is operating leverage because the nature of the product often dictates the type of production process needed.

Question

Quizplus · Accepted Answer

Financial leverage is related to the use of debt in the company's capital structure, which management can adjust based on strategic decisions. Operating leverage, however, is influenced by the company's fixed costs and production processes, which are often determined by the nature of the product and are less flexible.

Financial Leverage Is Typically More Under the Control of Management