This means that in terms of elasticity, profit sensitivity to risk was influenced by the project profitability to a much greater degree than by DOL, in accordance with the remark after (5).
This method allows minimal calculations to explain profit sensitivity and elasticity within the usual indicators of business planning: operational profitability and degree of operating leverage.
The formulae enable reduced calculations to explain profit sensitivity and elasticity using the usual indicators of business planning: operational profitability and degree of operating leverage.
An application can profit from the elasticity at the level of components (instead at a larger granularity level, as usual, at virtual machine level), if the component is able to scale.
Values of elasticity of profit sensitivity to risk were calculated for every project using formulae (3) and (4).
Using the formula (1), elasticity of profit sensitivity to risk is calculated as follows: ε R P / P % = 2 100 P % · R P for elasticity to profitability, (3) ε R P / DOL = - P % 100 R P for elasticity to the degree of operational leverage, (4).
Under the profit maximizing conditions, the output elasticity of one unit of input should equal to the cost share of that factor, and this is the theoretical foundation of using growth accounting method to calculate total factor productivity growth.
In terms of elasticity, project profitability is a much stronger influence than the degree of operating leverage on profit sensitivity to risk.
Similarly, as the elasticity factor increases, the profit of retailer increases moderately.
We lose elasticity and gain wrinkles.
