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Record W2965337479 · doi:10.5539/ijef.v11n8p138

Potential and Real Operating Leverage

2019· article· en· W2965337479 on OpenAlexvenueno aff
Marco A. Paganini

Bibliographic record

VenueInternational Journal of Economics and Finance · 2019
Typearticle
Languageen
FieldEconomics, Econometrics and Finance
TopicCapital Investment and Risk Analysis
Canadian institutionsnot available
Fundersnot available
KeywordsOperating leverageRevenueLeverage (statistics)EconomicsEarnings before interest and taxesEconometricsFinanceStatisticsMathematics

Abstract

fetched live from OpenAlex

In this paper has been analysed the EBIT dynamic of a firm with high margins, strong revenues growth not paired by an adequate EBIT growth. The concept of the Degree of Operating Leverage developed by the economic literature was useful to highlight such a problem without explaining the root causes. Even standard income statement analyses cannot explain in depth such an unsatisfactory trend without turning to management accounting that was not available, like in many SMEs. The Author used some information coming from income statements, Revenues accounting and the discrimination between Variable and Fixed Costs to investigate the business case. He developed a method that throws light on EBIT dynamic between two financial periods in terms of quantity, mix, price and cost variations either managed or planned by the Top Management. The basic finding is that EBIT dynamic is explained by some parameters in period 1, the past period, and some variations in period 2, the current period. The link between such periods is the Degree of Operating Leverage, declined in an ex-ante measure, already given for the past period, and the variations of the current period that determines its ex-post measure. In this framework becomes immediately glaring how it is possible to find high margins coupled with inadequate EBIT growth and where the faults lie. In general, the method developed is very useful to understand the EBIT dynamic of any firm and to plan its future course more accurately.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

How this classification was reachedexpand

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.000
metaresearch head score (Gemma)0.000
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Theoretical or conceptual · Consensus signal: Theoretical or conceptual
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.592
Threshold uncertainty score0.334

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0000.000
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0000.000
Science and technology studies0.0000.000
Scholarly communication0.0000.000
Open science0.0000.000
Research integrity0.0000.000
Insufficient payload (model declined to judge)0.0000.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.013
GPT teacher head0.206
Teacher spread0.193 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it

Classification

machine, unvalidated

Machine predicted; a candidate call from one teacher head, not a consensus.

The models applied no category: nothing in the taxonomy fit this work.
Study designTheoretical or conceptual
Domainnot available
GenreEmpirical

How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".

Quick stats

Citations4
Published2019
Admission routes1
Has abstractyes

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