Definitions for "operating leverage"
The percentage of fixed costs in a companys cost structure. Generally, the...
The extent to which fixed costs are part of a company's cost structure; the higher the proportion of fixed costs, the faster income increases or decreases with sales volumes.
Fixed operating costs divided by total (fixed plus variable) operating costs.
A financial method in which a small increase in the gross income results in a larger percentage increase in the net operating income. For more information, see the "Real Estate Investment Analysis Tools" article in the "Real Estate Investing" section.
A measure of how sensitive net income is to a given percentage change in sales. It is computed by dividing the contribution margin by net income.
Automatic increases in the net operating income or cash flow of income-producing real estate when income and expenses increase at the same rate; further enhanced when expenses are fixed.