Molycorp (FRA:9MO) Degree of Financial Leverage : 0.00 (As of Jun. 2015)

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What is Molycorp 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). Molycorp's Degree of Financial Leverage for the quarter that ended in Jun. 2015 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

FRA:9MO's Degree of Financial Leverage is not ranked ^*
in the Metals & Mining industry.
Industry Median: 1
* Ranked among companies with meaningful Degree of Financial Leverage only.

Molycorp Degree of Financial Leverage Historical Data

The historical data trend for Molycorp'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.

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Molycorp Degree of Financial Leverage Chart

Molycorp Annual Data

Trend

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Degree of Financial Leverage

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Molycorp Quarterly Data
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Competitive Comparison of Molycorp's Degree of Financial Leverage

For the Other Industrial Metals & Mining subindustry, Molycorp'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.

Molycorp's Degree of Financial Leverage Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Molycorp's Degree of Financial Leverage distribution charts can be found below:

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

Molycorp Degree of Financial Leverage Calculation

Molycorp's Degree of Financial Leverage for the quarter that ended in Jun. 2015 is calculated as:

Degree of Financial Leverage	=	% Change in Earnings per Share (Diluted)^**	/	% Change in EBIT
	=	( -1.916 (Jun. 2015) / -1.563 (Jun. 2014) - 1 )	/	( -578.479 (Jun. 2015) / -265.707 (Jun. 2014) - 1 )
	=	0.2258	/	1.1771
	=	0.19^***

** 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.

Molycorp (FRA:9MO) 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.

Molycorp Degree of Financial Leverage Related Terms

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Molycorp (FRA:9MO) Business Description

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GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Molycorp Inc (FRA:9MO) » Definitions » Degree of Financial Leverage

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Website

http://www.molycorp.com

Molycorp Inc, formerly known as Rare Earth Acquisitions LLC, was formed on March 4, 2010 as a new Delaware corporation. The Company manufactures custom engineered rare earth and rare metal products. Its business is organized into four reportable segments: Resources; Chemicals and Oxides; Magnetic Materials and Alloys; and Rare Metals. The Resources segment includes its operations at the Molycorp Mountain Pass Rare Earth Facility, where it conducts rare earth minerals extraction to produce: rare earth concentrates; REO, including lanthanum, cerium, neodymium, praseodymium, and yttrium; heavy rare earth concentrates, which include samarium, europium, gadolinium, terbium, dysprosium, and others; and SorbXTM, a line of proprietary rare earth-based water treatment products. The Chemicals and Oxides segment includes: production of REO at its operations at Molycorp Silmet; separated heavy rare earth oxides and other custom engineered materials from its facilities in Jiangyin, Jiangsu Province, China; and production of REO, salts of rare earth elements, or REEs, zirconium-based engineered materials and mixed rare earth/zirconium oxides from its facilities in Zibo, Shandong Province, China. The Magnetic Materials and Alloys segment includes: the production of Neo Powders through its wholly-owned manufacturing facilities in Tianjin, China, and Korat, Thailand, under the Molycorp Magnequench brand. This operating segment also includes manufacturing of neodymium and samarium magnet alloys, other specialty alloy products and rare earth metals at its MMA facility, located in Tolleson, Arizona. The Rare Metals segment produces, reclaims, refines and markets high value niche metals and their compounds that include gallium, indium, rhenium, tantalum, and niobium. Applications from products made in this segment include wireless technologies, LED, flat panel display, turbine, solar, catalyst, steel additive, electronics applications, and others. The Company's operations are subject to numerous and detailed international, national, federal, state and local laws, regulations and permits affecting the mining and mineral processing industry, including those pertaining to employee health and safety, environmental permitting and licensing, air quality standards, greenhouse gas, or GHG, emissions, water usage and disposal, pollution, waste management, plant and wildlife protection, handling and disposal of radioactive substances, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, the discharge of materials into the environment and groundwater quality and availability.

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