A company experienced a 12 % increase in earnings before interest and taxes and a 3 % increase in sales. What is the degree of operating leverage for this company?
A) 36
B) 6
C) 4
D) 9

Name: A company experienced a 12 % increase in earnings before interest and taxes and a 3 % increase in sales. What is the degree of operating leverage for this company? A) 36 B) 6 C) 4 D) 9
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Degree of Operating Leverage (DOL) = % change in EBIT / % change in sales
DOL = 12% / 3% = 4

A Company Experienced a 12 % Increase in Earnings Before