The degree of operating leverage is a financial ratio that measures the change in operating income because of a change in sales. A company with a big proportion of fixed cost to variable cost has a higher level of operating leverage.
If The operating leverage of the company is high, that means a large increment in sales can brings changes in profit. The degree of the operating leverage ratio helps analysts to measure the effect of change in sales on a company's earnings.
The formula for calculating operating leaverage ratio is as follows:
Degree of Operating Leaverage Ratio = Change in EBIT / Change in Sales
What can you do with Degree of Operating Leverage Calculator?
- It helps to calculate degree of operating leaverage and helps to maintain sales and earnings of your company.
- Users can see the accurate value of DOL ratio
- This calculator helps to share your calculations by URL.