If the degree of operating leverage of a firm is given as 2.8 times, it means:
Operating leverage gives the relationship between Sales and EBIT Operating Leverage = (%change in EBIT)/(%Change in Sales’) it follows that, % change in EBIT = DOL* % Change in Sales As such, if there is 1% change in sales and DOL is 2.8, it means that % change in EBIT will be 2.8%.