From the financial statements below, estimate each firm's operating leverage and identify the firm's stock that would typically outperform the broader stock market in a recessionary environment (i.e. a sharp decline in growth).

firm a :

2021:

sales = 300,000

costs = 265,000

EBIT = 35,000

2020:

sales = 342,000

costs = 296,800

EBIT = 45,200

firm b:

2021:

sales = 300,000

costs = 265,000

EBIT = 35,000

2020

sales = 342,000

costs = 270,000

EBIT = 72,000

		Firm A
		Firm B
		There is not enough information to decide