No central bank and no government wants to remove economic support too quickly and there is plenty of economic stimulus for companies profit margin to recover over the coming months. This is thanks to the positive effects of operational leverage on earnings. Example: a company has USD 100 in revenues and USD 10 in profits. Assuming revenues increase 2% to USD 102 and the cost base remains constant, operational gearing will lead profits to increase to USD 12 or +20%.
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Economic Stimulus
- Stimulus
