The degree of operating leverage is the ratio of the relative change in EBIT brought about by a relative change in fixed costs.

Name: The degree of operating leverage is the ratio of the relative change in EBIT brought about by a relative change in fixed costs.
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The degree of operating leverage measures the sensitivity of a company's operating income (EBIT) to a change in sales, not to a change in fixed costs. It is calculated by dividing the percentage change in EBIT by the percentage change in sales.

The Degree of Operating Leverage Is the Ratio of the Relative