Is it true that Operational gearing is used to measure the business risk of the company?
It can be calculated as (Contribution / Profit before Interest & Tax)?
What exactly are we looking for using this formula?
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Operational gearing
5y ago#1No. Operating gearing is one factor that affects the riskiness of a business.
As to what we are looking at, please watch my free lecture working through Chapter 13 of our free lectures notes.
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