2. Estimate Dell's degree of operating leverage (DOL) by calculating the percentage change in operating profits compared
Question:
2. Estimate Dell's degree of operating leverage (DOL) by calculating the percentage change in operating profits compared to the previous year and dividing that by the percentage change in sales. How does that compare to the result you would obtain for operating leverage using the formula DOL = 1 + fixed costs/profits? Why is there a difference when using these two approaches?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
Question Posted: