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 Definition of Operating leverage - Finance dictionary
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Definitions of terms begining
with the same letter as "Operating leverage"
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Operating leverage (See Chapters 10 and 20 of the Vernimmen)
Operating leverage links chabge in activity (measured by sales) with change in result (either operating profit or net income). Operating leverage depends on the level and nature of the breakeven point. Higher operating leverage will lead to greater risk for the company. The unlevered beta, or asset beta and the operating leverage are linked because the unlevered beta is determined by both the business in which the firm operates and the operating leverage of the firm.
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