Degree of Operating Leverage Calculator

About this calculator

This calculator computes the degree of operating leverage (DOL) as percentage change in EBIT ÷ percentage change in sales. A DOL of 3, for example, means a 10% rise in revenue produces roughly a 30% rise in operating profit — the effect of a company's fixed costs magnifying swings in sales into larger swings in profit.

Businesses with high fixed costs relative to variable costs — airlines, manufacturers with expensive plants, software companies with high upfront development costs — have high operating leverage, so profits swing hard in both directions with revenue. Analysts and finance teams use DOL to gauge how much operating income risk a company carries and to stress-test forecasts under a revenue downturn.