The following information is available for a firm:
| Revenue: | £800,000 |
| Variable Cost: | 400,000 |
| Fixed Cost: | 200,000 |
| Operating Income: | 200,000 |
| Interest: | 60,000 |
| Net Income: | £140, |
The firm’s degree of total leverage (DTL) is closest to:
DTL = (Revenue – Variable Cost) ÷ Net Income = (£ 800,000 - £ 400,000) ÷ £ 140,000 = 2.86.