DOL, DFL, DTL

C

cjones65

New member
Joined
Jun 18, 2026
Messages
0
Reaction score
0
Sorry for the amateurish question, but what’s typically considered “normal” for operating, financial, and total leverage?
 
This is going to depend largely on the industry and sector you are looking at, among other things.
 
Heavy industrial services – high fixed costs
 
Here are the numbers, but I’m not sure what they mean
DOL 1.20
DFL 1.05
DTL 1.26
Another question: what does it mean when these are volatile year after year? Say year 1 it had DTL of 1.8, then 0.9 for year two, then 1.26 the third year?
 
DFL = %change in net income / %change in operating income
DOL = %change in operating income / %change in sales
DTL = DFL*DOL = %change in net income / %change in sales
You would expect that there would be variations from year-to-year which should average out over the long-term.
 
You must log in or register to reply here.
Back
Top