the principle that decreasing the money spent on purchasing functions increases profit faster than increasing revenue as a result of marketing and sales is called the:

Question

the principle that decreasing the money spent on purchasing functions increases profit faster than increasing revenue as a result of marketing and sales is called the:

Accepted Answer

TheProfit Leverage Effectis the idea that lowering the amount spent onorganizationpurchasing activities improves profit more quickly than growth in revenue brought on by marketing and sales.Profit leverage effectimplies that a dollar saved on purchases always hasorganizationa greater impact on profit than a dollar increase in sales.Leverage effect measurements seek to quantify the level of business risk that a specificorganizationis currently facing. Business risk is the potential variation in revenue that a company may experience as well as theProfit Leverage Effectsensitivity of net income to revenue fluctuations. Leverage effect metrics are designed to illustrate how a company's fixed and movable expenses might affect profitability when revenues shift. We'll examine the operational leverage effect (OLE), financial leverage effect (FLE), and total leverage effect (TLE) ratios in this post.Learn more aboutProfit Leverage Effectherebrainly.com/question/28013598#SPJ4...

Unlock full access for 72 hours, watch your grades skyrocket.

For just $0.99 cents, get access to the powerful quizwhiz chrome extension that automatically solves your homework using AI. Subscription renews at $5.99/week.

QuizWhiz AI

Solved:

the principle that decreasing the money spent on purchasing functions increases profit faster than increasing revenue as a result of marketing and sales is called the:

the principle that decreasing the money spent on purchasing functions increases profit faster than increasing revenue as a result of marketing and sales is called the: