When a company has a high proportion of fixed costs (as compared to variable costs) O EBIT will change a relatively large amount when revenues change. This will protect the company from losses especially when there is an economic downturn. When revenues change, the percentage the company's Earnings Before Interest and Taxes (EBIT) will change is lower than if they had high variable costs. there is relatively low operating leverage. the company can more easily borrow without affecting risk much