# How to calculate the degree of financial leverage

Feb 27, · The degree of total leverage can be explained or calculated simply as: Degree of total leverage = Degree of operating leverage x Degree of financial leverage = The degree of operating leverage is equivalent to: Contribution margin (Total sales – Variable costs) / Earnings before interest and taxes (EBIT) The degree of financial leverage is equivalent to.

**CFA Level 1: Degree of Financial Leverage (DFL)**

Degree of Financial Leverage = EBIT. = (EBIT − Interest) ; 0. = 0. (0 − 0). Mar 21, · The degree of financial leverage (DFL) is: \frac {\text {\$ Million}} {\text {\$ Million }-\text { \$10 Million}}= $ Million − $10 Million$ Million = .

The formula used by this degree of financial leverage ratio calculator is explained below: DFL = Earnings before interest and taxes / Earnings before taxes. This financial indicator is usually used to: Measure the amount of debt a business has to repay;.

## 0 thoughts on “How to calculate the degree of financial leverage”