You are the owner of Kaldi Plc , a small caf located at the heart of

 

You are the owner of Kaldi Plc$,$ a small caf$é$ located at the heart of a university campus.

Kaldi sells specialty coffee, employs $12$ experienced baristas and serves $5,000$ customers per month using just two espresso machines. Last month, another caf$é$ opened next to yours. Due to this, you expect your sales levels to drop in the forthcoming year.

Discuss how Kaldi can alter its level of operating gearing considering the new$-$found competition.

 

Answer rating: 100% (QA)

Operating gearing refers to the percentage of fixed costs in a companys overall cost structure Its a measure of how sensitive a firms operating profit ... View the full answer