GURUFOCUS.COM » STOCK LIST » Technology » Software » Arax Holdings Corp (OTCPK:ARAT) » Definitions » Degree of Financial Leverage

Arax Holdings (Arax Holdings) Degree of Financial Leverage : -5.28 (As of Jan. 2024)


View and export this data going back to 2013. Start your Free Trial

What is Arax 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). Arax Holdings's Degree of Financial Leverage for the quarter that ended in Jan. 2024 was -5.28. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

ARAT's Degree of Financial Leverage is ranked better than
97.19% of 2673 companies
in the Software industry
Industry Median: 0.97 vs ARAT: -5.28

Arax Holdings Degree of Financial Leverage Historical Data

The historical data trend for Arax 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.

Arax Holdings Degree of Financial Leverage Chart

Arax Holdings Annual Data
Trend Oct12 Oct13 Oct14 Oct15 Oct16 Oct20 Oct21 Oct22 Oct23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only 0.08 - - -2.59 -11.25

Arax Holdings Quarterly Data
Apr16 Jul16 Oct16 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24
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 - 0.09 0.29 -11.25 -5.28

Competitive Comparison of Arax Holdings's Degree of Financial Leverage

For the Software - Infrastructure subindustry, Arax 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.


Arax Holdings's Degree of Financial Leverage Distribution in the Software Industry

For the Software industry and Technology sector, Arax Holdings's Degree of Financial Leverage distribution charts can be found below:

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



Arax Holdings Degree of Financial Leverage Calculation

Arax Holdings's Degree of Financial Leverage for the quarter that ended in Jan. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( -0.171 (Jan. 2024) / -0.022 (Jan. 2023) - 1 )/( 0.031 (Jan. 2024) / -0.11 (Jan. 2023) - 1 )
=6.7727/-1.2818
=-5.28***

* 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.


Arax Holdings  (OTCPK:ARAT) 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.


Arax Holdings Degree of Financial Leverage Related Terms

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


Arax Holdings (Arax Holdings) Business Description

Industry
Traded in Other Exchanges
N/A
Address
30 North Gould Street, Sheridan, WY, USA, 82801
Arax Holdings Corp invests in TechFin and blockchain-based software solutions companies. The primary focus of Arax is to fuse decentralized solutions with financial service providers within multiple markets and communication networks to bring blockchain to everyday life.

Arax Holdings (Arax Holdings) Headlines

No Headlines