01 Oct Operating Leverage – Free Tutorial for October
October’s free MBTN tutorial is Leverage 1: Operating Leverage, one of our finance, strategy, and entrepreneurship modules. We hear quite a bit about financial leverage (which is covered in Leverage 2), but what many new businesspeople don’t consider is how the level of operating leverage impacts their success. This part of leverage has more to do the fundamental nature of one’s business (margins, fixed and discretionary costs) and is more highly correlated with industry dynamics, though managerial decisions certainly influence it as well.
This month’s tutorial will help managers and students understand the following topics:
- Definition of operating leverage
- How operating leverage relates to margins, fixed, and discretionary costs
- The multiplicative impact on operating profit in relation to the breakeven point
- Impact of product mix on leverage
- How growth and product line mix interact to affect leverage
The free link has expired, but check out this month’s tutorial under the Business Education Resources Blog.
If you find this tutorial insightful, you might also consider the following additional resources:
Brochure for Finance Modules when used in an academic setting
Finance Bundle – includes all Finance Modules ($49.95)
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