Differences between operating leverage financial leverage and combined leverage?

A business that has a higher proportion of fixed costs and a lower proportion of variable costs is said to have used more operating leverage. Contribution per unit of sales is high.

A measure of Financial leverage is debt/equity.The outlay of funds is much higher than the equity and hence leverages profitabity by this factor if there were no debt.

Degree of combined leverage = Degree of operating leverage * Degree of financial leverage.