Degree of Operating Leverage Definition:

A measure, at a given level of sales, of how a percentage change in sales volume will affect profits. The degree of operating leverage is computed by dividing contribution margin by net income.

Other Related Accounting Articles:

• Operating Leverage Definition
• Cost Volume Profit (CVP) Formulas
• Positive and Negative Operating Leverage Definition
• Contribution Margin (CM) Ratio Definition
• Sales Quantity Variance
• What is Sales Volume Variance?
• Margin Definition
• Contribution Margin Definition
• Profit Velocity Analysis
• Cost Volume Profit Analysis