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ATC 3-4 Writing Assignment Operating leverage, margin of safety, and cost behavior In its Form 10-K Match Group, Inc., describes itself as follows: Match Group,
ATC 3-4 Writing Assignment Operating leverage, margin of safety, and cost behavior In its Form 10-K Match Group, Inc., describes itself as follows: Match Group, Inc., through its portfolio companies, is a leading provider of dating products available globally. Our portfolio of brands includes Tinder (, Match , Meetic (, OkCupid (, Hinge , Pairs TM, Plenty OfFish@, and OurTime , as well as a number of other brands, each designed to increase our users' likelihood of finding a meaningful connection.... Revenue at Match increased from $1,020.4 million in 2014 to $2,051.3 million in 2019 , for an increase of 101 percent. In the same period, operating income increased from $193.6 million to $648.5 million, for an increase of 235 percent. Required Write a memorandum that explains how a 101 percent increase in revenue could cause a 235 percent increase in profits. Your memo should address the following: a. An identification of the accounting concept involved. b. A discussion of bow various major types of costs incurred by Match were likely affected by the increase in its revenue. c. The effect of the increase in sales on Match's margin of safety
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