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Broadcom (Broadcom) Degree of Financial Leverage : 2.40 (As of Jan. 2024)


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What is Broadcom 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). Broadcom's Degree of Financial Leverage for the quarter that ended in Jan. 2024 was 2.40. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

AVGO's Degree of Financial Leverage is ranked worse than
92.7% of 973 companies
in the Semiconductors industry
Industry Median: 0.99 vs AVGO: 2.40

Broadcom Degree of Financial Leverage Historical Data

The historical data trend for Broadcom'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.

Broadcom Degree of Financial Leverage Chart

Broadcom Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.66 -0.17 1.32 1.21 1.36

Broadcom Quarterly Data
Apr19 Jul19 Oct19 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 1.23 1.30 1.43 1.36 2.40

Competitive Comparison of Broadcom's Degree of Financial Leverage

For the Semiconductors subindustry, Broadcom'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.


Broadcom's Degree of Financial Leverage Distribution in the Semiconductors Industry

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

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



Broadcom Degree of Financial Leverage Calculation

Broadcom'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
=( 26.98 (Jan. 2024) / 29.69 (Jan. 2023) - 1 )/( 14741 (Jan. 2024) / 15323 (Jan. 2023) - 1 )
=-0.0913/-0.038
=2.40***

* 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.


Broadcom  (NAS:AVGO) 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.


Broadcom Degree of Financial Leverage Related Terms

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


Broadcom (Broadcom) Business Description

Industry
Address
3421 Hillview Avenue, Palo Alto, CA, USA, 94304
Broadcom is the sixth-largest semiconductor company globally and has expanded into various software businesses, with over $30 billion in annual revenue. It sells 17 core semiconductor product lines across wireless, networking, broadband, storage, and industrial markets. It is primarily a fabless designer but holds some manufacturing in-house, like for its best-of-breed FBAR filters that sell into the Apple iPhone. In software, it sells virtualization, infrastructure, and security software to large enterprises, financial institutions, and governments.Broadcom is the product of consolidation. Its businesses are an amalgamation of former companies like legacy Broadcom and Avago Technologies in chips, as well as Brocade, CA Technologies, and Symantec in software.
Executives
Kirsten M. Spears officer: Principal Accounting Officer 1320 RIDDER PARK, SAN JOSE CA 95131
Hock E Tan director, officer: President and CEO BROADCOM INC., 1320 RIDDER PARK DRIVE, SAN JOSE CA 95131
Eddy W Hartenstein director
Mark David Brazeal officer: Chief Legal Officer 1320 RIDDER PARK DRIVE, SAN JOSE CA 95131
Charlie B Kawwas officer: SVP & Chief Sales Officer C/O AVAGO TECHNOLOGIES U.S. INC., 350 WEST TRIMBLE ROAD, SAN JOSE CA 95131
Justine Lien director 1320 RIDDER PARK DRIVE, SAN JOSE CA 95131
Harry L. You director EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Check Kian Low director 1320 RIDDER PARK DRIVE, SAN JOSE CA 95131
Raul J Fernandez director 11600 SUNRISE VALLEY DR, RESTON VA 20191
Gayla J Delly director 3000 TECHNOLOGY DR, ANGLETON TX 77515
Diane M Bryant director 2200 MISSION COLLEGE BLVD, SANTA CLARA CA 95054
Thomas H. Krause officer: Chief Financial Officer 1320 RIDDER PARK, SAN JOSE CA 95131
Henry Samueli director, officer: Chief Technical Officer 5300 CALIFORNIA AVENUE, IRVINE CA 92617-3038
Bryan Ingram officer: SVP & GM, Wireless Semicon Div C/O AVAGO TECHNOLOGIES LIMITED, 350 WEST TRIMBLE ROAD, BLDG. 90, SAN JOSE CA 95131
Donald Macleod director

Broadcom (Broadcom) Headlines

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