Operating leverage is measured as the responsiveness of the ...

[stevenposner]

Operating leverage is measured as the responsiveness of the firm's earnings before interest and
  taxes relative to fluctuations in sales.
 
  Indicate whether the statement is true or false

Question 2

Using the percent of sales method and assuming that no excess capacity exists, a 20 increase in
  sales will result in
 
  A) a 20 increase in total liabilities.
  B) a 20 increase in total assets.
  C) a 20 increase in the company's profit margin.
  D) a 20 increase in retained earnings.

[karmakat49]

Answer to Question 1

TRUE

Answer to Question 2

B