Question: What is operating leverage and how does high operating leverage affect a company? Reliance Group May See Shield from Creditors, The Wall Street Journal, August

What is operating leverage and how does high operating leverage affect a company? "Reliance Group May See Shield from Creditors," The Wall Street Journal, August

"Reliance Group May See Shield from Creditors," The Wall Street Journal, August 15, 2000, Devon Spurgeon, Gregory Zuckerman, and Francine L. Pope. Overview Reliance Group Holdings, Inc., an insurance company, reported a second quarter loss of over $500 mil- lion and stated that it may be forced to seek bankruptcy protection. A. M. Best downgraded the rating of Reliance Insurance Company, pointing to its high operating leverage as a potential source of danger.

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