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Paychex (Paychex) Degree of Financial Leverage : 1.05 (As of May. 2024)


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What is Paychex 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). Paychex's Degree of Financial Leverage for the quarter that ended in May. 2024 was 1.05. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

PAYX's Degree of Financial Leverage is ranked worse than
54.78% of 1026 companies
in the Business Services industry
Industry Median: 1 vs PAYX: 1.05

Paychex Degree of Financial Leverage Historical Data

The historical data trend for Paychex'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.

Paychex Degree of Financial Leverage Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.97 0.82 1.00 1.00 1.05

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
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 1.00 0.91 0.91 0.98 1.05

Competitive Comparison of Paychex's Degree of Financial Leverage

For the Staffing & Employment Services subindustry, Paychex'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.


Paychex's Degree of Financial Leverage Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Paychex's Degree of Financial Leverage distribution charts can be found below:

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



Paychex Degree of Financial Leverage Calculation

Paychex's Degree of Financial Leverage for the quarter that ended in May. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 4.67 (May. 2024) / 4.3 (May. 2023) - 1 )/( 2255.3 (May. 2024) / 2084.9 (May. 2023) - 1 )
=0.086/0.0817
=1.05***

* 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.


Paychex  (NAS:PAYX) 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.


Paychex Degree of Financial Leverage Related Terms

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


Paychex (Paychex) Business Description

Industry
Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 740,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Flaschen David J S director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Christopher C Simmons officer: VP, Controller & Treasurer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Martin Mucci officer: Sr. Vice President 911 PANORAMA TRAIL S, ROCHESTER NY 14625
Joseph M Tucci director EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Joseph M Velli director
Elizabeth Roaldsen officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Theresa M. Payton director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Stephanie L Schaeffer officer: Chief Legal Officer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701

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