What is Electro Scientific Industries 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).
Electro Scientific Industries's Degree of Financial Leverage for the quarter that ended in Dec. 2018 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Electro Scientific Industries's Degree of Financial Leverage or its related term are showing as below:
ESIO's Degree of Financial Leverage is not ranked *
in the Semiconductors industry.
Industry Median: 0.98 * Ranked among companies with meaningful Degree of Financial Leverage only.
Electro Scientific Industries Degree of Financial Leverage Historical Data
* 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.
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Electro Scientific Industries Degree of Financial Leverage Chart
Competitive Comparison of Electro Scientific Industries's Degree of Financial Leverage
For the Semiconductors subindustry, Electro Scientific Industries'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.
Electro Scientific Industries's Degree of Financial Leverage Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Electro Scientific Industries's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Electro Scientific Industries's Degree of Financial Leverage falls into.
Electro Scientific Industries Degree of Financial Leverage Calculation
Electro Scientific Industries's Degree of Financial Leverage for the quarter that ended in Dec. 2018 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.
Electro Scientific Industries (NAS:ESIO) 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.
Electro Scientific Industries Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of Electro Scientific Industries's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Electro Scientific Industries (Electro Scientific Industries) Business Description
Electro Scientific Industries Inc is a manufacturer of electronic components. The company operates through two segments: Component Processing and Micromachining. The Component Processing segment includes interconnect products, semiconductor products, and component products. The interconnect, semiconductor and component products are sold to manufacturers of electronic components and are used to drill, cut, trim, ablate and test and mark features for the functionality of the component. The Micromachining segment includes products that are sold to manufacturers of end devices across various industries and are used to drill, cut or mark features on a range of materials, generally on the casing or external surface of the end device.
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