The degree of a firm’s Pre-tax Cash Flow Operating Leverage is a measure of the sensitivity of its cash flow from operations (EBITDA) to changes in. its capital invested. Solution Correct answer is option (b) revenues. Formula is Degree of pre-tax cash flow operating leverage = 1 + (Fixed Costs/EBITDA) Now, EBITDA is calculated by deductiong COGS and other expenses from sales revenues. A change in revenues directly impacts EBITDA..