Which of the following mathematical equations is used to calculate the degree of operating leverage (DOL)? (? = change)
A. DOL = % ? in net operating income (NOI)/% ? in sales
B. DOL = % ? in sales/% ? in earnings before taxes (EBT)
C. DOL = % ? in earnings before interest and taxes (EBIT)/% ? in earnings per share (EPS)
D. DOL = % ? in sales/% ? in earnings per share (EPS)
E. DOL = % ? in earnings per share (EPS)/% ? in earnings before taxes (EBT)
Answer: A
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C)D)
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