What Are the Two Ways That Other Comprehensive Income May

question 40

Essay

What are the two ways that other comprehensive income may be reported on corporate financial statements?

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Definitions:

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is left over after variable costs are subtracted, expressed as a percentage of sales revenue.

Variable Expense Ratio

A ratio computed by dividing variable expenses by sales.

Operating Leverage

A financial concept that measures the proportion of fixed costs in a company's cost structure, indicating its sensitivity to changes in sales volume.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.