Lambert, Sherwood Lane; Krieger, Kevin; Mauck, Nathan - In: International Journal of Financial Studies : open … 12 (2024) 1, pp. 1-19
We propose a generalized, practitioner-oriented operating-leverage model for predicting operating income using net … operating-leverage model so that the ratio of sales to the cost of sales remains constant for the reference and forecast periods …. Inspired by prior research, we adjust depreciation and SG&A for cost stickiness. We find that using our generalized operating-leverage …