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Degree of Total Leverage Calculator

Enter the degree of operating leverage and the degree of financial leverage to get the DTL.

How to use

  1. Enter your values in the fields above.
  2. Press Calculate to see your result instantly.
  3. Use the Share button to copy a link to your result.

About this calculator

Degree of total leverage combines both types of business risk into one number: DTL = DOL × DFL, the degree of operating leverage (how much operating income swings with sales, driven by fixed operating costs) multiplied by the degree of financial leverage (how much that swings again by the time it reaches earnings per share, driven by fixed interest expense).

A DTL of, say, 3 means a 10% change in sales translates into roughly a 30% change in EPS — CFOs and equity analysts use it to gauge how much earnings volatility a company's cost and debt structure amplifies, which matters directly for risk assessment when a business faces a sales downturn.

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