DFL & DOL clarifications

CFA Level I Corporate Finance
#1

From Kaplan:

DOL = (Sales – Variable Costs) / (Sales – Variable Costs – Fixed Costs)

DFL = EBIT / (EBIT – I)

Kaplan’s QuickSheet states, “Operating leverage: % change in EBIT from a given % change in sales.”

Also, “Financial leverage: % change in net income from a given % change in EBIT.”

Does the QuickSheet’s explanation conflict with Kaplan’s online Q Bank description?

#2

They’re equivalent, as it turns out.

#3

Excellent, that answers my question.

#4

Good to hear.

I could show you the algebra, but perhaps better not to.