Siddhi Sisodia posted an Question
June 14, 2021 • 20:56 pm 30 points
  • UGC NET
  • Commerce

Oues): which formula is 4sed to measure the degree of operating leverage ? c (b) ebit ebit (a) sales ebit ebit (c) (d) c ebt c ans.: (b) ebit

Oues): Which formula is 4sed to measure the degree of Operating leverage ? C (B) EBIT EBIT (A) Sales EBIT EBIT (C) (D) C EBT C Ans.: (B) EBIT

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  • Sanju best-answer

    Operating leverage occurs when a firm wants to meet its fixed expenses regardless of sales volume. One can say it is the tendency of operating profit to vary disproportionately with sales. Calculation of Operating leverage = Contribution/ Operating profit or Operating Leverage = C/EBIT TO CALCULATE THE DEGREE OF OPERATING LEVERAGE (DOL) DOL = % Change in EBIT/ %Chnage in sales

  • Rucha rajesh shingvekar

    Correct answer is option b ie= Contribution / EBIT

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