Quote:
Originally Posted by billisheikh
and the difference between financial and operating leverage
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yaar financial leverage tau easy hai its when a company decides to get its assets financed by taking loans. ,borrowed money se investment kare koi company tau its financial leverage.
operating leverage is a bit tricky they way i understand is that its the ratio between the variable to fixed cost implemented in a company, If fixed cost is more than compared to variable cost then the company is utilizing operating levarage . but when the ratio is reverse than the operating levarage is very less