OPERATING RISK Definition

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OPERATING RISK is the inherent or fundamental risk of a firm; without regard to financial risk. It is the risk that is created by operating leverage. Sometimes called business risk.

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ASSET TURNOVER RATIO is a general measure of a firms ability to generate sales in relation to total assets. It should be used only to compare firms within specific industry groups and in conjunction with other operating ratios to determine the effective employment of assets. Formula: REVENUE/ASSETS.

CHARGE OFF see BAD DEBT.

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