Company A experiences an increase in sales of 6% and an increase in earnings before interest and taxes of 18%. Company B experiences an increase in earnings before interest and taxes of 10% after a 5% increase in sales. Which of the following would be correct?I. Company A has a higher degree of operating leverage than company B.II. Company A has relatively lower variable operating costs and higher fixed operating costs compared to company B.

Key Topics in BAR Financial Management Financial Statement Analysis: Evaluating, comparing, and analyzing financial data, including Ratio Analysis and variance analysis between actual and budgeted results. Data Analytics & Performance Management: Utilizing data to assess performance and making strategic business decisions. Technical Accounting Topics: Handling complex areas such as business combinations, stock compensation, derivatives, and hedge accounting, as well as revenue recognition and lease accounting. Financial Risk Management: Identifying financial risks and applying mitigation... Show more

Key Topics in BAR Financial Management
Financial Statement Analysis: Evaluating, comparing, and analyzing financial data, including Ratio Analysis and variance analysis between actual and budgeted results.
Data Analytics & Performance Management: Utilizing data to assess performance and making strategic business decisions.
Technical Accounting Topics: Handling complex areas such as business combinations, stock compensation, derivatives, and hedge accounting, as well as revenue recognition and lease accounting.
Financial Risk Management: Identifying financial risks and applying mitigation strategies, such as using derivatives and diversifying portfolios.
State and Local Governments: Accounting and reporting standards applicable to government entities (10–20% of the exam).

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