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The Banking System Will Have To Be Rescued | Alasdair MacLeod

Wealthion - Be Financially Resilient

CHAPTER

The Role of Operating Leverage in the Private Equity Market

We've often talked about how coal mining companies are a levered way to play the price of metal itself. What we're talking about there is operating leverage, which is a very accounting 101 concept. When you have a company that has fixed costs and if they can increase that revenue, disproportionately flow to the bottom line profits. That's what we call high operating leverage. It's actually a very healthy thing.

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