Operating and Financial Leverage Calculator
Show how an entered volume change affects operating profit and pre-tax per-share earnings under fixed price/cost assumptions.
YOUR CALCULATION
Result
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Calculation steps
Work through one step at a time or reveal the complete calculation. The steps use your current inputs.
How to calculate
Calculate contribution, EBIT and earnings before tax at base and changed volumes. Calculate local operating/financial leverage ratios at the base point.
DOL=contribution/EBIT; DFL=EBIT/(EBIT−interest); combined=contribution/(EBIT−interest)
Worked example
The sample base contribution is 200000, EBIT 100000 and pre-tax profit 80000. A 10% unit increase raises pre-tax profit to 100000, a 25% rise; combined leverage is 2.5.
Assumptions and input details
Constant unit price, variable cost per unit, fixed operating costs, interest and share count. This is a local/scenario cost model, not a demand forecast. Zero EBIT or pre-tax profit makes corresponding leverage ratios undefined. Per-share amounts are explicitly before tax, not reported accounting EPS. Profit percentage change is omitted for a nonpositive base pre-tax profit. No live market data or national tax rules are inferred. Enter consistent amounts in one currency unless explicitly stated otherwise.
References: OpenStax: operating leverage
Using this calculator
Can I enter my own problem?
Yes. Replace the example values with your own inputs. The result, calculation steps, tables and applicable diagrams update from those inputs. Blank or invalid values clear the result; example values are never silently substituted for missing inputs.
Are the results exact?
Results use floating-point arithmetic and displayed rounding. Read the formula, assumptions and any stated data precision before interpreting the result.
Is my input uploaded?
The calculation runs in your browser. No account, file upload or external AI service is required. Inputs are not saved between page reloads.
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