Operating leverage is the use of fixed operating costs to increase the effects of sales changes on earnings before interest and taxes (EBIT).

Operating leverage can be defined as the use of fixed operating costs to increase the effects of changes in sales on earnings before interest and taxes (EBIT).

Operating leverage is due to the existence of fixed costs that the company must pay to operate.

Operating leverage refers to the effects that fixed costs have on shareholder returns.

Operating leverage can be achieved by manufacturing their own products or subcontracting another company to manufacture them.