Distinguish between the following: 'Operating leverage' and 'financial leverage'.

Operating Leverage: Operating leverage indicates the proportion of fixed operating charges. Higher operating leverage indicates higher quantum of fixed operating charges. It is the measure of Business Risk. Operating leverage is defined as the firm's ability to use fixed operating cost to magnify the effect of changes in sales on its Earnings before Interest and Taxes (EBIT). The percentage change in EBIT occurring due to a given percentage change in sales is known as the degree of operating leverage. The operating leverage of 1.5 means that 1% increase in sales would result in 1.5% increase in EBIT (i.e. operating profit). Degree of Operating Leverage (DOL) = Percentage changes in EBIT / Percentage change in sales Or, DOL = Contribution / EBIT Financial Leverage: Financial Leverage indicates the proportion of fixed financial charges, in the form of interest cost. Higher financial leverage indicates higher quantum of fixed financial charges. It is a measure of Financial Risk. The percentage change in Earnings Per Share (EPS) occurring due to a given percentage change in Earnings before Interest and Tax (EBIT) is known as the degree of Financial leverage. The Financial Leverage of 1.5 means that 1% increase in EBIT would result in 1.5% increase in EPS. Degree of Financial Leverage (DFL) = Percentage changes in EPS / Percentage change in EBIT Or, DFL = EBIT / EBT