Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
Cobra's Degree of Financial Leverage for the quarter that ended in Dec. 2013 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Cobra's Degree of Financial Leverage or its related term are showing as below:
LTS:0E0G's Degree of Financial Leverage is not ranked *
in the Vehicles & Parts industry.
Industry Median: 0.98 * Ranked among companies with meaningful Degree of Financial Leverage only.
Cobra Degree of Financial Leverage Historical Data
The historical data trend for Cobra'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 Cobra's Degree of Financial Leverage
For the Auto Parts subindustry, Cobra'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.
Cobra's Degree of Financial Leverage Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Cobra's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Cobra's Degree of Financial Leverage falls into.
Cobra Degree of Financial Leverage Calculation
Cobra's Degree of Financial Leverage for the quarter that ended in Dec. 2013 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.
Cobra (LTS:0E0G) 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.
Cobra Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of Cobra's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Cobra was founded in 1975. The Company operates in the field of security solutions for the automotive market. The Group designs & manufactures electronic systems & provides location based services for managing a number of vehicle-related risks such as theft, carjacking and parking accidents. It operates through the following business areas: Electronic Systems & Location Based Services. The Electronic Systems business designs, develops, manufactures, and markets anti-theft components and devices and parking aid systems. The Location Based Services business provides stolen vehicle recovery, fleet management, and insurance solutions. The Group distributes directly in Italy, France and Great Britain, and through a network of about 40 distributors in other countries. The Group sells directly to the auto manufacturers in Europe, and particularly in Great Britain, Germany, France and Belgium, and in Asia (China, Korea and Japan). The Group operates on the European and Asian markets through its subsidiaries, namely Cobra Italia, Cobra France, Cobra UK, Cobra Deutschland, Easydriver, Drive Service, Autonostop, Cobra Japan, Cobra (Beijing) Automotive Technologies and Cobra Automotive Technologies Korea in addition to a network of local independent distributors.
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