What is The GEO Group 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).
The GEO Group's Degree of Financial Leverage for the quarter that ended in Dec. 2023 was 3.99. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for The GEO Group's Degree of Financial Leverage or its related term are showing as below:
GEO's Degree of Financial Leverage is ranked worse than 94.43% of 1023
companies
in the Business Services industry
Industry Median: 1.02
vs GEO: 3.99
The GEO Group Degree of Financial Leverage Historical Data
The historical data trend for The GEO Group'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 The GEO Group's Degree of Financial Leverage
For the Security & Protection Services subindustry, The GEO Group'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.
The GEO Group's Degree of Financial Leverage Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, The GEO Group's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where The GEO Group's Degree of Financial Leverage falls into.
The GEO Group Degree of Financial Leverage Calculation
The GEO Group's Degree of Financial Leverage for the quarter that ended in Dec. 2023 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.
The GEO Group (NYSE:GEO) 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.
The GEO Group Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of The GEO Group's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
The GEO Group (The GEO Group) Business Description
The GEO Group Inc specializes in detention facilities and community-reentry centers. It operates in four segments: U.S. Secure Services, which primarily encompasses U.S.-based secure services business; Electronic Monitoring and Supervision Services, which conducts its services in the United States, represents services provided to adults for monitoring services and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants; Reentry Services conducts its services in the United States represents services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs; and International Services.
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