GURUFOCUS.COM » STOCK LIST » Technology » Software » Firstsource Solutions Ltd (NSE:FSL) » Definitions » Degree of Financial Leverage

Firstsource Solutions (NSE:FSL) Degree of Financial Leverage : -1.15 (As of Sep. 2024)


View and export this data going back to 2007. Start your Free Trial

What is Firstsource Solutions 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). Firstsource Solutions's Degree of Financial Leverage for the quarter that ended in Sep. 2024 was -1.15. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

NSE:FSL's Degree of Financial Leverage is ranked better than
93.29% of 2667 companies
in the Software industry
Industry Median: 0.97 vs NSE:FSL: -1.15

Firstsource Solutions Degree of Financial Leverage Historical Data

The historical data trend for Firstsource Solutions'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.

Firstsource Solutions Degree of Financial Leverage Chart

Firstsource Solutions 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 3.73 0.70 1.05 1.98 0.10

Firstsource Solutions Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 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 0.89 0.40 0.10 236.42 -1.15

Competitive Comparison of Firstsource Solutions's Degree of Financial Leverage

For the Information Technology Services subindustry, Firstsource Solutions'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.


Firstsource Solutions's Degree of Financial Leverage Distribution in the Software Industry

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

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



Firstsource Solutions Degree of Financial Leverage Calculation

Firstsource Solutions'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
=( 7.63 (Sep. 2024) / 7.86 (Sep. 2023) - 1 )/( 7762.45 (Sep. 2024) / 7569.85 (Sep. 2023) - 1 )
=-0.0293/0.0254
=-1.15***

* 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.


Firstsource Solutions  (NSE:FSL) 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.


Firstsource Solutions Degree of Financial Leverage Related Terms

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


Firstsource Solutions Business Description

Traded in Other Exchanges
Address
Mindspace, Link Road, 5th Floor, Paradigm ‘B’ Wing, Malad (West), Mumbai, MH, IND, 400 064
Firstsource Solutions Ltd is engaged in the business of providing customer management services like contact centers, transaction processing, and debt collection services. The company's business segment includes Banking and Financial Services, Healthcare, Communication, Media and Technology, and Diverse Industries. It generates maximum revenue from the Banking and Financial Services segment. Geographically, it derives a majority of its revenue from the United States of America.

Firstsource Solutions Headlines

From GuruFocus

Weekly Guru Bargains Highlights: FSL, PWE, QLIK, MRVL, MSCI

By hyperman299 GuruFocus 11-12-2012

Freescale - Demand for This Company's Products on the Rise

By Doug Ehrman Doug Ehrman 01-23-2012

WEEKLY CFO SELLS HIGHLIGHT: FSL, HOT, VRSK, HTZ

By Jimmy Xiao gurujx 04-21-2013

Weekly Insider Sells Highlight: FSL, IMS, EA, PANW

By Jimmy Xiao gurujx 05-17-2015