OPERATIONAL GEARING Definition

Bookmark and Share

OPERATIONAL GEARING is the higher the proportion of fixed costs relative to variable operating costs, the higher the operational gearing. This results in greater business risk. A retailer has high fixed costs relative to variable costs, so has a lot of business risk. See GEARING and FINANCIAL GEARING.

Learn new Accounting Terms

DEBT MANAGEMENT RATIO examines the degree to which a firm uses debt financing or financial leverages.

DOLLAR-WEIGHTED RATE OF RETURN is also called the internal rate of return; the interest rate that makes the present value of the cash flows from all the sub-periods in an evaluation period plus the terminal market value of the portfolio equal to the initial market value of the portfolio.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.