1) Operating leverage is: a) Operating leverage is net income divided by revenues and shows how profitable the company is. b) Companies with low operating leverage are generally preferred. c) Operating leverage is gross margin divided by revenues d) Operating leverage shows the amount of debt a company has on its balance sheet. e) A & B only 2) When conducting financial analysis and looking at the balance sheet the amount of leverage refers to: a) The amount of debt as compared to the amount of shareholders' equity. b) The amount of current liabilities as compared the amount of current assets. c) The amount of shareholders' equity versus the amount of total assets. d) The amount of current liabilities versus the amount of shareholders' equity e) None of the above