GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Farmer Bros Co (NAS:FARM) » Definitions » Degree of Financial Leverage

Farmer Bros Co (Farmer Bros Co) Degree of Financial Leverage : 0.33 (As of Dec. 2023)


View and export this data going back to 1990. Start your Free Trial

What is Farmer Bros Co 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). Farmer Bros Co's Degree of Financial Leverage for the quarter that ended in Dec. 2023 was 0.33. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Farmer Bros Co's Degree of Financial Leverage or its related term are showing as below:

FARM's Degree of Financial Leverage is ranked better than
80.11% of 1840 companies
in the Consumer Packaged Goods industry
Industry Median: 1.01 vs FARM: 0.33

Farmer Bros Co Degree of Financial Leverage Historical Data

The historical data trend for Farmer Bros Co'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.

Farmer Bros Co Degree of Financial Leverage Chart

Farmer Bros Co Annual Data
Trend Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only -0.84 -2.00 -0.13 0.47 -0.37

Farmer Bros Co Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 -0.11 -0.39 -0.37 -0.23 0.33

Competitive Comparison of Farmer Bros Co's Degree of Financial Leverage

For the Packaged Foods subindustry, Farmer Bros Co'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.


Farmer Bros Co's Degree of Financial Leverage Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Farmer Bros Co's Degree of Financial Leverage distribution charts can be found below:

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



Farmer Bros Co Degree of Financial Leverage Calculation

Farmer Bros Co's Degree of Financial Leverage for the quarter that ended in Dec. 2023 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( -2.88 (Dec. 2023) / -1.56 (Dec. 2022) - 1 )/( -6.966 (Dec. 2023) / -1.951 (Dec. 2022) - 1 )
=0.8462/2.5705
=0.33***

* 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.


Farmer Bros Co  (NAS:FARM) 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.


Farmer Bros Co Degree of Financial Leverage Related Terms

Thank you for viewing the detailed overview of Farmer Bros Co's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Farmer Bros Co (Farmer Bros Co) Business Description

Traded in Other Exchanges
Address
1912 Farmer Brothers Drive, Northlake, TX, USA, 76262
Farmer Bros Co is engaged in manufacturing, wholesaling, and distributing coffee, tea, and culinary products to food-service establishments and retailers in the United States. The company's customers include restaurants, hotels, offices, casinos, convenience stores, healthcare facilities, and other food-service providers. The company's product categories consist of roast and ground coffee, frozen liquid coffee, flavoured and unflavored iced and hot teas, culinary products, spices, and other beverages including cappuccino, cocoa, granitas, and ready-to-drink iced coffee. The products are sold under the brands of Farmer Brothers, Artisan Collection by Farmer Brothers, Superior, Metropolitan, and China Mist.
Executives
David Pace director
Brad Bollner officer: Interim CFO 1912 FARMER BROTHERS DRIVE, NORTHLAKE TX 76262
Bradley Louis Radoff director 2727 KIRBY DRIVE, UNIT 29L, HOUSTON TX 77098
Thomas E. Bauer officer: Vice President, Head of DSD 1912 FARMER BROTHERS DRIVE, NORTHLAKE TX 76262
Moore John E. Iii officer: Vice President, Head of Coffee 1912 FARMER BROTHERS DRIVE, NORTHLAKE TX 76262
Moragne Maurice S.j. officer: Chief Sales Officer 1912 FARMER BROTHERS DRIVE, NORTHLAKE TX 76262
Family Foundation Radoff other: See Footnote 1 2727 KIRBY DRIVE, UNIT 29L, HOUSTON TX 77098
Todd E Diener other: See Footnote 1
Jcp Investment Management, Llc other: See Footnote 1 1177 WEST LOOP SOUTH, SUITE 1320, HOUSTON TX 77027
Jcp Investment Partnership, Lp other: See Footnote 1 1177 WEST LOOP SOUTH, SUITE 1320, HOUSTON TX 77027
Jcp Investment Partners, Lp other: See Footnote 1 1177 WEST LOOP SOUTH, SUITE 1320, HOUSTON TX 77027
Jcp Investment Holdings, Llc other: See Footnote 1 1177 WEST LOOP SOUTH, SUITE 1320, HOUSTON TX 77027
James C Pappas other: See Footnote 1 1177 WEST LOOP SOUTH, SUITE 1320, HOUSTON TX 77027
22nw Gp, Inc. 10 percent owner 1455 NW LEARY WAY, SUITE 400, SEATTLE WA 98107
22nw Fund, Lp 10 percent owner 1455 NW LEARY WAY, SUITE 400, SEATTLE WA 98107