Operating leverage exists when?

Question

managerial acct.

Answer 1

Here are some web sites with a pretty good explanation of operating leverage. Operating leverage to me is a measure of riskyness in the structure of a company. It gives an observer an idea of how earnings or profits will be affected by a change in revenue or sales. So operating leverage seems to exist when you have revenue and costs.

http://financial-education.com/2007/04/1...

http://www.westga.edu/~bquest/1998/lever...