What is ReAlpha Tech Degree of Financial Leverage?
Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
ReAlpha Tech's Degree of Financial Leverage for the quarter that ended in Mar. 2024 was 1.03. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for ReAlpha Tech's Degree of Financial Leverage or its related term are showing as below:
AIRE's Degree of Financial Leverage is ranked worse than 50.68% of 1758
companies
in the Real Estate industry
Industry Median: 1.02
vs AIRE: 1.03
ReAlpha Tech Degree of Financial Leverage Historical Data
The historical data trend for ReAlpha Tech's Degree of Financial Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of ReAlpha Tech's Degree of Financial Leverage
For the Real Estate Services subindustry, ReAlpha Tech's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ReAlpha Tech's Degree of Financial Leverage Distribution in the Real Estate Industry
For the Real Estate industry and Real Estate sector, ReAlpha Tech's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where ReAlpha Tech's Degree of Financial Leverage falls into.
ReAlpha Tech Degree of Financial Leverage Calculation
ReAlpha Tech's Degree of Financial Leverage for the quarter that ended in Mar. 2024 is calculated as:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
ReAlpha Tech (NAS:AIRE) Degree of Financial Leverage Explanation
Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.
The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.
Be Aware
The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.
ReAlpha Tech Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of ReAlpha Tech's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
ReAlpha Tech Corp is an early-stage company that develops and utilizes its artificial intelligence-focused technology stack to empower retail investor participation in short-term rental properties, which are real estate units listed for a rental term. It offers retail investors the opportunity to participate in short-term rental properties it will acquire by offering interest in each property portfolio. Its revenues primarily consist of short-term rental revenues from the rental of its properties via Airbnb and such digital hospitality platforms. The company has two segments (i) platform services and (ii) rental business. The company generates the majority of its revenue from the Platform services segment.
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