Morningstar (Morningstar) Degree of Financial Leverage : 6.15 (As of Mar. 2024)

Morningstar Degree of Financial Leverage Chart

Morningstar Annual Data
	Trend	Dec14	Dec15	Dec16	Dec17	Dec18	Dec19	Dec20	Dec21	Dec22	Dec23
Degree of Financial Leverage		Get a 7-Day Free Trial					1.46	1.11	1.16	1.67	2.00

Morningstar Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Degree of Financial Leverage	Get a 7-Day Free Trial															1.62	1.62	6.64	2.00	6.15

Competitive Comparison of Morningstar's Degree of Financial Leverage

For the Financial Data & Stock Exchanges subindustry, Morningstar'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.

Morningstar's Degree of Financial Leverage Distribution in the Capital Markets Industry

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

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

Morningstar Degree of Financial Leverage Calculation

Morningstar'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.

Morningstar  (NAS:MORN) 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.

Morningstar Degree of Financial Leverage Related Terms

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