I need two paragraphs | Business & Finance homework help
The relationship among operating leverage, financial leverage, and total leverage of the firm is that they are all measures of risk. Operating leverage measures the sensitivity of a firm’s operating income to changes in sales or production volumes. Financial leverage measures the degree to which a company relies on borrowed money for its funding. Total leverage takes into account both operating and financial leverages to measure the overall risk associated with investing in a particular firm.
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