OPERATING PROFIT Definition

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OPERATING PROFIT is Gross Profit minus Operating Expenses.

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SG&A refers to the indirect overhead costs contained within the Sales, General and Administrative expense/cost categories. Generally, SG&A expenses of <30% are exceptional, while SG&A approaching 100% indicates a highly competitive industry. Consistency of SG&A is key.

LEVERAGED LEASE is a lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset and grants the lender a lien on the assets and a pledge of the lease payments to secure the borrowing.

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