CMA_01

Jun 02, 2026 08:48 · 0:44 · English · Whisper Turbo · 2 Wasemaji

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Index YA TAA

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S… Speaker 1 (CMA_01)

small sales increase but big profit jump here's why operating leverage

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S… Speaker 1 (CMA_01)

refers to how much a business depends upon its fixed cost like salaries

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S… Speaker 1 (CMA_01)

rents equipments so higher fixed cost is equal to higher operating

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S… Speaker 2 (CMA_01)

leverage let us assume you run a gym

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S… Speaker 1 (CMA_01)

you pay heavy rent and equipment cost but each new customer

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S… Speaker 1 (CMA_01)

almost cost nothing so when more people join in your cost it

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S… Speaker 1 (CMA_01)

does not increase but your income does and your profit shoots up rapidly but

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S… Speaker 1 (CMA_01)

if customers decrease you will still have to pay those fixed expenses and that

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S… Speaker 1 (CMA_01)

result in adverse impact on your income your profits clearly

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S… Speaker 1 (CMA_01)

shows down so high operating leverage is equal to high profit potential

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S… Speaker 1 (CMA_01)

but also high risk stay tuned for more such videos

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