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    Effect of Operating Leverage on Company's Risk Position

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    Describe how expanding the division with the highest operating leverage would affect the company's risk position.
    Based on the degree of operating leverage, how will this impact the risk?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:15 pm ad1c9bdddf
    https://brainmass.com/economics/factors-of-production/effect-operating-leverage-company-s-risk-position-37250

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    Operating leverage is the name given to the impact on operating income of a change in the level of output. The operating leverage reflects the extent to which a change in sales affects earnings and a high operating leverage ratio, with a highly elastic product demand, will cause sharp earnings fluctuations. If the ...

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    Explore how expanding the division with the highest operating leverage would affect the company's risk position.

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