Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
LinnCo LLC's Degree of Financial Leverage for the quarter that ended in Sep. 2016 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for LinnCo LLC's Degree of Financial Leverage or its related term are showing as below:
LNCOQ's Degree of Financial Leverage is not ranked *
in the Oil & Gas industry.
Industry Median: 1 * Ranked among companies with meaningful Degree of Financial Leverage only.
LinnCo LLC Degree of Financial Leverage Historical Data
The historical data trend for LinnCo LLC'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 LinnCo LLC's Degree of Financial Leverage
For the Oil & Gas E&P subindustry, LinnCo LLC'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.
LinnCo LLC's Degree of Financial Leverage Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, LinnCo LLC's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where LinnCo LLC's Degree of Financial Leverage falls into.
LinnCo LLC Degree of Financial Leverage Calculation
LinnCo LLC's Degree of Financial Leverage for the quarter that ended in Sep. 2016 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.
LinnCo LLC (OTCPK:LNCOQ) 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.
LinnCo LLC Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of LinnCo LLC's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
LinnCo LLC is a Delaware limited liability company formed on April 30, 2012, under the Delaware Limited Liability Company Act. The Company owns interests in Linn Energy, LLC. It had no significant assets or operations other than those related to its interest in LINN Energy. LINN Energy is an independent oil and natural gas company. Its properties, including those acquired in the Berry acquisition, are located in seven operating regions in the U.S. are Rockies, which includes properties located in Wyoming (Green River Basin and Powder River Basin), Utah (Uinta Basin), North Dakota (Williston Basin) and Colorado (Piceance Basin); Mid-Continent, which includes properties in Oklahoma, Louisiana and the eastern portion of the Texas Panhandle (including the Granite Wash and Cleveland horizontal plays); Hugoton Basin, which includes properties located in Kansas and the Shallow Texas Panhandle; California, which includes the San Joaquin Valley Basin and the Los Angeles Basin; Permian Basin, which includes areas in west Texas and southeast New Mexico; Michigan/Illinois, which includes the Antrim Shale formation in the northern part of Michigan and oil properties in southern Illinois; and East Texas, which includes properties located in east Texas.
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