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HELLA GmbH KGaA (LTS:0R3U) Degree of Financial Leverage : 0.42 (As of Jun. 2024)


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What is HELLA GmbH KGaA 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). HELLA GmbH KGaA's Degree of Financial Leverage for the quarter that ended in Jun. 2024 was 0.42. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

LTS:0R3U's Degree of Financial Leverage is ranked better than
76.53% of 1261 companies
in the Vehicles & Parts industry
Industry Median: 1.02 vs LTS:0R3U: 0.42

HELLA GmbH KGaA Degree of Financial Leverage Historical Data

The historical data trend for HELLA GmbH KGaA'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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HELLA GmbH KGaA Degree of Financial Leverage Chart

HELLA GmbH KGaA Annual Data
Trend May14 May15 May16 May17 May18 May19 May20 May21 May22 Dec23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.53 1.18 0.77 1.20 0.43

HELLA GmbH KGaA Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
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 1.12 0.64 0.43 0.29 0.42

Competitive Comparison of HELLA GmbH KGaA's Degree of Financial Leverage

For the Auto Parts subindustry, HELLA GmbH KGaA'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.


HELLA GmbH KGaA's Degree of Financial Leverage Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, HELLA GmbH KGaA's Degree of Financial Leverage distribution charts can be found below:

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



HELLA GmbH KGaA Degree of Financial Leverage Calculation

HELLA GmbH KGaA's Degree of Financial Leverage for the quarter that ended in Jun. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 2.96 (Jun. 2024) / 2.66 (Jun. 2023) - 1 )/( 555.876 (Jun. 2024) / 438.985 (Jun. 2023) - 1 )
=0.1128/0.2663
=0.42***

* 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.


HELLA GmbH KGaA  (LTS:0R3U) 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.


HELLA GmbH KGaA Degree of Financial Leverage Related Terms

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HELLA GmbH KGaA Business Description

Traded in Other Exchanges
Address
Rixbecker Strasse 75, Lippstadt, NW, DEU, 59552
HELLA GmbH & Co KGaA is a manufacturer of lighting and electronic components and systems for the automotive industry. The company also produces complete vehicle modules, air-conditioning systems, and vehicle electrical systems in its joint-venture companies, as well as products for specialist vehicles. Further, Hella operates a trade organisation for automotive parts, accessories, diagnosis, and services in Europe. The company is controlled through a pooled family majority shareholding in the group. The company has three reportable segments which are Lighting, Electronics and Lifecycle Solutions. The company generates majority of the revenue from Lighting segment.

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