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DEF Co. increased its revenue from $100 million to $120 million due to an upswing in the business cycle that resulted in higher demand. To
DEF Co. increased its revenue from $100 million to $120 million due to an upswing in the business cycle that resulted in higher demand. To fund this sales expansion, operating costs increased from $50 million to $55 million, partly due to higher inflation. Assess DEF's operating performance. Operating performance was positive as sales increased at a faster rate than costs. Operating performance was negative because sales growth was more than offset by higher costs. Operating performance was negative due to the inflationary environment. Operating performance cannot be assessed without reference to the balance sheet
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