OPERATIONAL GEARING Definition

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.

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THEORY OF CONSTRAINTS is a management approach that focuses on identifying and relaxing the constraints that limit an organizations ability to reach a higher level of goal attainment.

CAPITAL FUNDS is the total of capital debentures, if any, capital stock, if any, surplus, undivided profits, unallocated reserves, guaranty fund, and guaranty fund surplus.

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