Strict cost control is the best risk mitigation for a low operating leverage company. TRUE OR FALSE ?

Very much correct Mr.Ariful. However, the question is more about in ideal conditions what is one of the best risk mitigation possible. The question should have been tweaked a little. My answer would be TRUE. One of the major risks faced by a low operating leverage company is the high variable costs when the company's sales performance is improving. Cost control measures adopted to cut down these high variable costs are expected to improve the profit margins.

Its true, low leverage companies have problems with the pricing of a product, they must consider market and the competition in the market for the same product or service. Also they must provide their products and services in good quality with low price. Strict Cost control can reduce or minimize the cost of the product or service and can provide it to the customers with a reasonable price.

 

Thanks for the invitation Sir

Yours Sincerely

Kripesh

Thank you for invitation , agree with expert answer given here.

agree with the answers ..................................................

Agree with Sai Animesh Kumar Nandivada

It is false . It depend on situation

agree with ur answer mr. sai