Profit moves 5.4 times faster than revenue, both ways
Operating Leverage Calculator
Fixed costs turn every revenue move into a bigger profit move. This measures your multiple, and the revenue fall that would take profit to zero.
Operating Leverage Calculator
How hard profit moves when revenue moves, in both directions, and the revenue fall that wipes it out.
What the multiple means
Operating leverage is contribution over profit. A DOL of 5 means every point of revenue growth is five points of profit growth, and every point of revenue lost is five points of profit gone.
High leverage is wonderful on the way up and brutal on the way down, which is why the growth plan and the downside plan are the same spreadsheet with the sign flipped.
This is also why customer concentration hurts: the profit a leaving customer takes is exactly their revenue share times this multiple.
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Profit at every revenue level from thirty per cent down to thirty per cent up, so both directions are on one page.
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RESOURCES
Fresh takes on business and accounting.
Trading profit is split on a time basis. Interest, rent, gains, donations and dividends each follow their own rule, and mixing them up misstates both accounting periods.
A long period of account needs two separate capital allowances computations, and since April 2026 they are not even calculated at the same writing down rate.
Company law allows accounts to run for 18 months; corporation tax never allows an accounting period longer than 12. Here is how the split is drawn.
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