The percentage change in a firm's EBIT that results in a 1% change in sales or output is known as the
A)degree of combined leverage
B)degree of financial leverage
C)degree of operating leverage
D)degree of business risk

Question

Quizplus · Accepted Answer

The percentage change in a firm's EBIT that results from a change in sales or output is known as the degree of operating leverage. It helps measure the sensitivity of a company's EBIT to changes in sales or output.

The Percentage Change in a Firm's EBIT That Results in a 1