Higher operating leverage is related to the use of additional __________.common equity financingdebt financingfixed costsvariable costs

Higher operating leverage is related to the use of additional fixed costs.

Here's why:

1. Operating leverage refers to the proportion of fixed costs in a company's cost structure. Fixed costs are costs that do not change with the level of output, such as rent or salaries.

2. A company with high operating leverage has a larger proportion of fixed costs and will see a greater impact on profits when sales volume changes.

3. When sales increase, a larger proportion of each sale goes towards covering fixed costs, which can lead to higher profits. Conversely, when sales decrease, a larger proportion of each sale goes towards covering fixed costs, which can lead to lower profits.

4. Therefore, higher operating leverage is related to the use of additional fixed costs.