OPERATING LEVERAGE
A measurement of the degree to which a firm or project incurs a combination of fixed and variable costs.
- A business that makes few sales, with each sale providing a very high gross margin, is said to be highly leveraged. A business that makes many sales, with each sale contributing a very slight margin, is said to be less leveraged. As the volume of sales in a business increases, each new sale contributes less to fixed costs and more to profitability.
- A business that has a higher proportion of fixed costs and a lower proportion of variable costs is said to have used more operating leverage. Those businesses with lower fixed costs and higher variable costs are said to employ less operating leverage.
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ECONOMIC CALENDAR
Time | Country | Indices | Period |
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06:30 | Tertiary Industry Index | Mar | |
02:30 | Westpac Consumer Sentiment | May | |
03:30 | Monetary Policy Meeting Minutes | ||
05:00 | Credit Card Spending | Apr | |
08:00 | PPI | Apr | |
10:00 | Current Account (sa) | Mar | |
11:00 | Current Account (sa) | Mar | |
12:00 | CBI industrial order books balance | May | |
14:30 | Consumer Price Index | Apr |