What is Operating Leverage?
Operating Leverage — How much a company’s profit rises (or falls) with sales, given its mix of fixed and variable costs. High fixed costs mean high operating leverage.
In simple terms
High operating leverage magnifies profit when sales grow.
Why Operating Leverage matters when you invest
Understanding operating leverage helps you make better-informed decisions when you invest and trade on ROAR by DP TradeKING. Open a free account to put it into practice — ₹0 delivery brokerage and zero-commission direct mutual funds.
Operating Leverage — frequently asked questions
What is Operating Leverage?
How much a company’s profit rises (or falls) with sales, given its mix of fixed and variable costs. High fixed costs mean high operating leverage.
What does Operating Leverage mean in the stock market?
How much a company’s profit rises (or falls) with sales, given its mix of fixed and variable costs. High fixed costs mean high operating leverage. High operating leverage magnifies profit when sales grow.
Can you give an example of Operating Leverage?
High operating leverage magnifies profit when sales grow.
Put it into practice — open a free account.
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