Georgia, Inc. and Florida Company both sell the same kinds of products. Sales and expenses for each company are:
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Georgia, Inc.
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Florida Company
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|
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Sales
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$90,000
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$90,000
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Variable costs
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25,000
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55,000
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Fixed costs
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55,000
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25,000
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Profits
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10,000
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10,000
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Which of these companies have the highest operating leverage? Which of these companies has more financial risks?
Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. For problems, be sure to answer all questions and provide all requested information.