What is operating leverage
What is meant by the phrase "capturing operating leverage"?
What is meant by the phrase "capturing operating leverage"?
+93 | Sr Asso / VP Unemployment Check-in | 56 | 1d | |
+35 | What did you do after signing? | 12 | 10h | |
+25 | Resume Gap after 2.5 Years in PE | 5 | 2d | |
+23 | PE Recruiting From IB- Play It Safe Or Reach For Best Fund Possible? | 10 | 21h | |
+21 | Public company LBO | 7 | 2d | |
+20 | Vista Lateral Associate | 12 | 3d | |
+18 | VP HF Lateral to PE | 1 | 2d | |
+17 | PE / IB in NYC from Cambridge compared to US colleges | 9 | 7s | |
+16 | How Technical Are You / Most People Really? | 3 | 2d | |
+16 | Management Meeting Dynamic | 3 | 17h |
Career Resources
Growing revenue faster than your costs, namely fixed opex, resulting in higher margins
In high operating leverage business fixed costs don’t move much.
Operating leverage is a double edged sword. Great when revenue is growing but bad when revenue is reducing.
Why is it bad when revenues aren’t growing as fast?
Think of marginal analysis. When a high operating leverage business wins or loses a customer.
When revenue declines, a greater proportion of the contribution margin negatively hits EBITDA.
Id saepe harum nihil. Rerum temporibus totam officiis ducimus veniam et doloremque tenetur. Voluptate laudantium voluptatem veritatis dicta nisi hic fugiat.
Qui enim repellat eos qui qui. Doloribus vel labore dolorem iste maxime earum impedit. Placeat necessitatibus nostrum odit molestiae vel. Corporis iure et molestiae in et. Ut exercitationem et nobis pariatur quo. Autem sit asperiores laudantium temporibus. Et odit qui explicabo dolorem at dignissimos.
Fuga beatae temporibus omnis omnis. Consequuntur voluptatem et velit placeat temporibus laborum et. Dolore ea perspiciatis tempora aut consequatur. Reiciendis maxime temporibus voluptatem sunt repudiandae ut. Possimus sint eum sed iusto odio voluptate soluta illo. Impedit qui enim nesciunt et. Praesentium occaecati officiis ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...