Finance CalculatorsBusiness FinanceFree Tool
Operating Leverage Calculator
Calculate your Degree of Operating Leverage (DOL) - contribution margin divided by EBIT - to see how sensitive profit is to changes in sales.
How to Use Operating Leverage Calculator
- 1Enter your contribution margin
- 2Enter your EBIT
- 3Click Calculate to see your Degree of Operating Leverage
Frequently Asked Questions
DOL = Contribution Margin divided by EBIT. It measures how much EBIT moves for a given percentage change in sales.
A DOL of, say, 2.5 means a 1% change in sales causes roughly a 2.5% change in EBIT. Higher DOL means more fixed costs in your cost structure, which magnifies both upside and downside as sales fluctuate.
This tool (DOL) measures sales-to-EBIT sensitivity from your cost structure. Financial Leverage (DFL) separately measures EBIT-to-EPS sensitivity from your debt/interest burden. Combined Leverage multiplies the two together to show the full sales-to-EPS sensitivity.
Use the Contribution Margin Calculator on this site (Revenue minus Variable Costs) if you don't already have this figure, then enter the result here alongside your EBIT.
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