2 margin of safety a reduced profit margins will

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2. Margin of Safety: a. Reduced profit margins will affect the margin of safety of any of the businesses in the Reed Elsevier group as reduced profit margins indicate reduced margin of safety which in turn indicates higher risk to the company if there are any fluctuations in the market. b. Based on the information provided, static sales during 2009 & 2010 were by and large due to lower advertising budgets of clients & few people attended the conference.
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13 | P a g e 3. Mazda: a. Yes, A profit-volume graph presentation of the relationships between costs and volume and profits may be more useful than the typical breakeven chart for auto manufacturers like Mazda. b. 4. Examples of companies having High and Low degrees of operating leverage are: High Operating leverage: MRF, MICROSOFT Low Operating leverage: WALMART, COSTCO THE END ‐8 ‐6 ‐4 ‐2 0 2 4 6 8 0 0.2 0.4 0.6 0.8 1 1.2 CostsvsProfits No. of units Profit‐Volume chart Cost‐Profit
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