________ leverage is concerned with the relationship between sales revenues and earnings before interest and taxes.
A) Investing
B) Operating
C) Variable
D) Total

Question

Quizplus · Accepted Answer

Operating leverage measures the impact of fixed costs on a company's profits by examining the relationship between sales revenues and earnings before interest and taxes. It helps in determining the breakeven point for a company and how much additional revenue is required to cover fixed costs and generate profit. Investing leverage is concerned with the company's use of debt to finance investments, variable leverage measures the effect of changes in variable costs on profits, and total leverage measures the overall risk of a company's capital structure.

________ Leverage Is Concerned with the Relationship Between Sales Revenues