Question: Estimate and interpret the degree of operating leverage of P Ltd. and Q Ltd. Based on the following data: P Ltd. (Amt. in ) Q

Estimate and interpret the degree of operating leverage of P Ltd. and Q Ltd. Based on the following data:

 

P Ltd.

 (Amt. in ₹)

Q Ltd.

(Amt. in ₹) 

Sales

16,00,000 

20,00,000

Fixed Costs

5,00,000

10,00,000

Variable expenses are 40% of sales for firm P and 30% for firm Q.

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