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Sage Group (The) (Sage Group (The)) Degree of Financial Leverage : 1.70 (As of Sep. 2023)


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What is Sage Group (The) 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). Sage Group (The)'s Degree of Financial Leverage for the quarter that ended in Sep. 2023 was 1.70. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Sage Group (The)'s Degree of Financial Leverage or its related term are showing as below:

SGPYY's Degree of Financial Leverage is ranked worse than
82.72% of 2627 companies
in the Software industry
Industry Median: 0.99 vs SGPYY: 1.70

Sage Group (The) Degree of Financial Leverage Historical Data

The historical data trend for Sage Group (The)'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.

Sage Group (The) Degree of Financial Leverage Chart

Sage Group (The) Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.08 5.19 1.03 3.20 1.70

Sage Group (The) Semi-Annual Data
Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Mar17 Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23
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 1.03 1.76 3.20 2.16 1.70

Competitive Comparison of Sage Group (The)'s Degree of Financial Leverage

For the Software - Application subindustry, Sage Group (The)'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.


Sage Group (The)'s Degree of Financial Leverage Distribution in the Software Industry

For the Software industry and Technology sector, Sage Group (The)'s Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where Sage Group (The)'s Degree of Financial Leverage falls into.



Sage Group (The) Degree of Financial Leverage Calculation

Sage Group (The)'s Degree of Financial Leverage for the quarter that ended in Sep. 2023 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 1.011 (Sep. 2023) / 1.14 (Sep. 2022) - 1 )/( 403.465 (Sep. 2023) / 415.629 (Sep. 2022) - 1 )
=-0.1132/-0.0293
=3.87***

* 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.


Sage Group (The)  (OTCPK:SGPYY) 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.


Sage Group (The) Degree of Financial Leverage Related Terms

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


Sage Group (The) (Sage Group (The)) Business Description

Traded in Other Exchanges
Address
C23 - 5 & 6 Cobalt Park Way, Cobalt Park, Newcastle upon Tyne, GBR, NE28 9EJ
The Sage Group is a U.K.-based provider of accounting and enterprise resource planning, or ERP, software, predominantly to customers in the U.S. and Europe. The company was founded in 1981 and historically sold on-premises software products with perpetual software licenses. However, the company is transitioning toward cloud connected and cloud native products, sold via software-as-a-service, or SaaS, contracts. Sage's main cloud native products include Sage Accounting, for small businesses, and Sage Intacct, which Sage acquired in 2017, for midsize businesses.