Operating leverage measures the effect of fixed operating costs on the relationship between ________.
A) sales and EBIT
B) sales and EPS
C) EBIT and EPS
D) EBIT and dividend

Question

Quizplus · Accepted Answer

Operating leverage measures the effect of fixed operating costs on the relationship between sales and EBIT (earnings before interest and taxes). It does not have a direct impact on EPS (earnings per share), dividend, or other financial metrics.

Operating Leverage Measures the Effect of Fixed Operating Costs on the Relationship