AVADA GroupASX:AVD -16.67% Degree of Financial Leverage is 0.98 as of Dec. 2025. The stock has 6 warning signs investors should review. Among 1,710 Construction companies, AVADA Group ranks better than 54.09% on this metric.
Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
AVADA Group's Degree of Financial Leverage for the quarter that ended in Dec. 2025 was 0.98. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for AVADA Group's Degree of Financial Leverage or its related term are showing as below:
ASX:AVD's Degree of Financial Leverage is ranked better than 54.09% of 1710
companies
in the Construction industry
Industry Median: 1.01
vs ASX:AVD: 0.98
AVADA Group (ASX:AVD) 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.
AVADA Group Degree of Financial Leverage Related Terms
AVADA Group Degree of Financial Leverage Historical Data
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The historical data trend for AVADA 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.
AVADA Group Degree of Financial Leverage Competitor Comparison
For the Infrastructure Operations subindustry, AVADA 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.
AVADA Group Degree of Financial Leverage vs Construction Industry
For the Construction industry and Industrials sector, AVADA Group's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where AVADA Group's Degree of Financial Leverage falls into.
* 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.
What does a Degree of Financial Leverage of 0.98 mean?
AVADA Group (ASX:AVD) has a Degree of Financial Leverage of 0.98 as of Dec. 2025. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in EBIT. View historical data for AVADA Group and its competitors. According to the industry distribution chart, AVADA Group ranks #785 out of 1710 companies in the Construction industry, placing it in the top 45.9%.
Is AVADA Group's Degree of Financial Leverage too high?
AVADA Group's current Degree of Financial Leverage is 0.98. The Construction industry median Degree of Financial Leverage is 1.01. AVADA Group's value of 0.98 is 3% below this industry median. Based on the distribution chart, AVADA Group ranks #785 out of 1710 companies in the Construction industry, which is above the industry midpoint.
How does AVADA Group's Degree of Financial Leverage compare to competitors?
According to the Construction industry distribution chart, AVADA Group ranks #785 out of 1710 companies for Degree of Financial Leverage. This puts AVADA Group in the upper half of its industry. The industry median Degree of Financial Leverage is 1.01. AVADA Group's value of 0.98 is 3% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Financial Leverage for a Construction company?
The median Degree of Financial Leverage among Construction companies is 1.01, based on 1,710 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Financial Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Financial Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. AVADA Group's current Degree of Financial Leverage of 0.98 is 3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Financial Leverage mean?
A high Degree of Financial Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in EBIT. View historical data for AVADA Group and its competitors. For the Construction industry, the median Degree of Financial Leverage is 1.01 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. AVADA Group's current Degree of Financial Leverage is 0.98. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is AVADA Group stock overvalued right now?
Based on GuruFocus' analysis, AVADA Group (ASX:AVD) is currently considered Possible Value Trap. The stock's GF Value™ is A$0.58, compared to a current price of A$0.10 — trading 82.8% below its estimated fair value. The current Degree of Financial Leverage is 0.98 and 3% below the Construction industry median of 1.01. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Financial Leverage calculated?
Degree of Financial Leverage is calculated from a company's financial statements. For AVADA Group (ASX:AVD), the current Degree of Financial Leverage is 0.98 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
AVADA Group Ltd is an Australian traffic management operator and ancillary service provider with an established network throughout Queensland and New South Wales. The group has four reportable segments: Queensland Traffic Management, New South Wales Traffic Management, Victoria Traffic Management and New Zealand Traffic Management. Queensland Traffic Management is the key revenue generator for the group. It provides services to government clients and contractors in the civil infrastructure and maintenance sector.
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