🎯Cost-Volume-Profit (CVP) Analysis
Degree of Operating Leverage
Contribution Margin ÷ Net Income = Degree of Operating Leverage
What It Means
How sensitive profit is to sales changes. High leverage = big swings.
Related Formulas
Contribution Margin per Unit
Sales Price per Unit - Variable Cost per Unit = Contribution Margin per Unit
Contribution Margin Ratio
Contribution Margin ÷ Sales × 100 = CM Ratio %
Break-Even Point in Units
Fixed Costs ÷ Contribution Margin per Unit = Break-Even Units
Break-Even Point in Sales Dollars
Fixed Costs ÷ Contribution Margin Ratio = Break-Even Sales $
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