Exam 4 ratios Flashcards
1
Q
what does contribution margin show
A
how much profit a company makes on a per unit basis
2
Q
what does operating leverage show
A
shows the senstivity of the net income to chnages in revenue
high=more sensistive
3
Q
what does margin of safety show
A
how much a companies sales can decrease before becoming unprofitable
4
Q
A
