Operating leverage primarily impacts which aspect of a business?

Operating leverage primarily impacts operating income. This concept refers to the degree to which a firm can use fixed costs in its cost structure to amplify the effects of a change in sales on its operating income. When a company has high operating leverage, a small increase in sales can lead to a significant increase in operating income because most of the company's costs are fixed and do not change with the level of sales.

In contrast, when sales volume increases, the fixed costs are spread over a larger number of units, enhancing profitability. This relationship is crucial in understanding how a company's cost structure can affect its financial performance, especially in industries with a high proportion of fixed costs. Overall, operating income is directly influenced by changes in sales, which is the essence of operating leverage.