easy · Corporate Credit Analysis
What is 'Negative Operating Leverage' as it relates to credit risk?
- A situation where a small decline in revenue leads to a disproportionately large decline in EBITDA due to high fixed costs.
- A strategy where a firm intentionally reduces its debt to increase its credit rating.
- The practice of using cash flow to pay down the revolver before term loans.
- When a company's depreciation exceeds its annual capital expenditure.
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