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IG Group Holdings (LSE:IGG) Degree of Financial Leverage : 2.04 (As of Nov. 2023)


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What is IG Group Holdings 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). IG Group Holdings's Degree of Financial Leverage for the quarter that ended in Nov. 2023 was 2.04. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for IG Group Holdings's Degree of Financial Leverage or its related term are showing as below:

LSE:IGG's Degree of Financial Leverage is ranked worse than
89.79% of 666 companies
in the Capital Markets industry
Industry Median: 0.96 vs LSE:IGG: 2.04

IG Group Holdings Degree of Financial Leverage Historical Data

The historical data trend for IG Group Holdings'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.

* Premium members only.

IG Group Holdings Degree of Financial Leverage Chart

IG Group Holdings Annual Data
Trend May14 May15 May16 May17 May18 May19 May20 May21 May22 May23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.00 0.99 1.08 1.93 4.71

IG Group Holdings Semi-Annual Data
May14 Nov14 May15 Nov15 May16 Nov16 May17 Nov17 May18 Nov18 May19 Nov19 May20 Nov20 May21 Nov21 May22 Nov22 May23 Nov23
Degree of Financial Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.44 1.93 5.17 4.71 2.04

Competitive Comparison of IG Group Holdings's Degree of Financial Leverage

For the Capital Markets subindustry, IG Group Holdings'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.


IG Group Holdings's Degree of Financial Leverage Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, IG Group Holdings's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where IG Group Holdings's Degree of Financial Leverage falls into.



IG Group Holdings Degree of Financial Leverage Calculation

IG Group Holdings's Degree of Financial Leverage for the quarter that ended in Nov. 2023 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 0.74 (Nov. 2023) / 1.15 (Nov. 2022) - 1 )/( 405.7 (Nov. 2023) / 491.4 (Nov. 2022) - 1 )
=-0.3565/-0.1744
=2.04***

* 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.


IG Group Holdings  (LSE:IGG) 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.


IG Group Holdings Degree of Financial Leverage Related Terms

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IG Group Holdings (LSE:IGG) Business Description

Traded in Other Exchanges
Address
Cannon Bridge House, 25 Dowgate Hill, London, GBR, EC4R 2YA
IG Group Holdings PLC provides online trading services to its clients. The majority of the company's revenue stems from its derivative products and contracts for difference (CFDs). The company operates through various segments which are The U.K. segment which derives its revenue from financial spread bets, CFDs, binary options, and execution-only stockbroking. The Australian segment derives its revenue from CFDs and binary options. The European segment derives its revenue from CFDs, binary options, and execution-only stockbroking. The Rest of the World segment derives its revenue from the operation of a regulated futures and options exchange as well as CFDs and binary options. The company generates more than half of its revenue from the U.K., followed by Europe and Australia.

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