Elasticity of operating profit of the company

In the financial literature, operating profit is most often defined as the difference between total income and total expenses. When calculating operating profit, the costs do not include financing costs, ie interest on borrowed funds. Its amount depends on the selling price, the volume of production and sales, the amount of average variable costs and the level of total fixed costs. Determining the degree of sensitivity of operating profit to changes in its determining factors implies prior classification of all costs into fixed and variable components, where it is assumed that their variable component has a proportional, and fixed absolutely fixed character. The assessment of the degree of elasticity of operating profit, ie its sensitivity, to changes in the level of selling price, average variable costs and the amount of total fixed costs in the literature has not received the necessary attention. Therefore, in this paper we have approached the processing of all possible coefficients of elasticity of operating profit, and not only the elasticity of operating profit to the change in production volume, ie the factor of business leverage, to which financial theory pays special attention.