operating leverage

[cnd]

I understand why DOL is percentage change of EBIT / percentage change in unit volume.
But how is it that Incremental Contribution Margin / Incremental EBIT margin “magically” gets you to the same place?

 

[malnoll]

This is a perfect example that working out what the equations actually consist of, by breaking them down as far as possible, will allow you to understand alot more than just memorizing a formula……think of this too,
if the unit volume goes up by 1, is the percentage change in EBIT the same as that units incremental cont.margin? You can get this.