calculation of degree of operating leverage
The operating leverage of a business is the ratio of the change in operating income to the change in sales. Operating leverage involves using a large proportion of fixed costs to variable costs in the process of the firm. The higher the level of operating leverage, the more volatile the EBIT (earnings before interest and taxes) figure will be comparative to a given change in sales, all other things residual the same.
DOL= %change in EBIT / %change in sales