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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
  1. 1Enter your contribution margin
  2. 2Enter your EBIT
  3. 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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