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Alexander Forbes Group Holdings (JSE:AFH) Degree of Financial Leverage : 16.53 (As of Sep. 2024)


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What is Alexander Forbes Group 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). Alexander Forbes Group Holdings's Degree of Financial Leverage for the quarter that ended in Sep. 2024 was 16.53. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

JSE:AFH's Degree of Financial Leverage is ranked worse than
96.55% of 406 companies
in the Diversified Financial Services industry
Industry Median: 0.84 vs JSE:AFH: 16.53

Alexander Forbes Group Holdings Degree of Financial Leverage Historical Data

The historical data trend for Alexander Forbes Group 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.

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Alexander Forbes Group Holdings Degree of Financial Leverage Chart

Alexander Forbes Group Holdings Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.96 0.71 49.86 4.87 -0.19

Alexander Forbes Group Holdings Semi-Annual Data
Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
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 -24.01 4.87 1.53 -0.19 16.53

Competitive Comparison of Alexander Forbes Group Holdings's Degree of Financial Leverage

For the Financial Conglomerates subindustry, Alexander Forbes Group 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.


Alexander Forbes Group Holdings's Degree of Financial Leverage Distribution in the Diversified Financial Services Industry

For the Diversified Financial Services industry and Financial Services sector, Alexander Forbes Group Holdings's Degree of Financial Leverage distribution charts can be found below:

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



Alexander Forbes Group Holdings Degree of Financial Leverage Calculation

Alexander Forbes Group Holdings's Degree of Financial Leverage for the quarter that ended in Sep. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 0.538 (Sep. 2024) / 0.668 (Sep. 2023) - 1 )/( 1007 (Sep. 2024) / 1019 (Sep. 2023) - 1 )
=-0.1946/-0.0118
=16.53***

* 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.


Alexander Forbes Group Holdings  (JSE:AFH) 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.


Alexander Forbes Group Holdings Degree of Financial Leverage Related Terms

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Alexander Forbes Group Holdings Business Description

Traded in Other Exchanges
N/A
Address
115 West Street, Sandown, Johannesburg, GT, ZAF, 2196
Alexander Forbes Group Holdings Ltd is a South Africa-based diversified financial services company. The company operates through seven segments: Retirement consulting, Healthcare consulting, Investments, Individual consulting, Multinational consulting, Solutions & Enablement, and Client Services & Business Optimization. Its services include Consulting and Actuarial Services, Retirement Fund Services, Healthcare Services, and Trust and Beneficiary Services. The company also offers online services.

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