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What is the degree of combined leverage (DCL)? A combined degree of leverage (DCL) is a leverage ratio that summarizes the combined effect of the degree of operating leverage (DOL) and the degree of financial leverage on earnings per share (EPS), given a change especially sales. This ratio can be used to help determine the …

What is the degree of operational leverage (DOL)? The degree of operating leverage (DOL) is a multiple that measures how much a company’s operating profit will change in response to a change in sales. Firms with a high proportion of fixed costs (or costs that do not change with production) to variable costs (costs that …

Fundamental analysis uses the degree of financial leverage (DFL) to determine the sensitivity of a company’s earnings per share (EPS) when there is a change in its earnings before interest and taxes (EBIT). When a business has a high DFL, it usually has high interest payments, which negatively impacts EPS. Degree of financial leverage DFL …