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Which of the Following Is TRUE

question 54

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Which of the following is TRUE?


Definitions:

Degree of Operating Leverage

A ratio that measures the sensitivity of a company's operating income to its sales, indicating how revenue growth translates to growth in operating income.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales volume.

Margin of Safety

The amount by which sales can drop before reaching the break-even point, typically expressed as a percentage of current sales.

Sales

The total revenue generated from goods or services sold by a company.

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