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Wise (CHIX:WISEL) Degree of Operating Leverage : 2.77 (As of Sep. 2024)


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What is Wise Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. Wise's Degree of Operating Leverage for the quarter that ended in Sep. 2024 was 2.77. The higher Degree of Operating Leverage, the higher operating risk the company will take.

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

CHIX:WISEl's Degree of Operating Leverage is ranked worse than
72.7% of 2659 companies
in the Software industry
Industry Median: 0.78 vs CHIX:WISEl: 2.77

Wise Degree of Operating Leverage Historical Data

The historical data trend for Wise's Degree of Operating 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.

Wise Degree of Operating Leverage Chart

Wise Annual Data
Trend Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
Degree of Operating Leverage
Get a 7-Day Free Trial 1.49 - -0.02 2.99 3.95

Wise Semi-Annual Data
Mar19 Mar20 Sep20 Mar21 Sep21 Mar22 Sep22 Mar23 Sep23 Mar24 Sep24
Degree of Operating Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only 1.57 2.99 3.59 3.95 2.77

Competitive Comparison of Wise's Degree of Operating Leverage

For the Information Technology Services subindustry, Wise's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating 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.


Wise's Degree of Operating Leverage Distribution in the Software Industry

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

* The bar in red indicates where Wise's Degree of Operating Leverage falls into.


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Wise Degree of Operating Leverage Calculation

Wise's Degree of Operating Leverage for the quarter that ended in Sep. 2024 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 600 (Sep. 2024) / 305.1 (Sep. 2023) - 1 )/( 1720.5 (Sep. 2024) / 1275.9 (Sep. 2023) - 1 )
=0.9666/0.3485
=2.77***

* 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 EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating 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.


Wise  (CHIX:WISEl) Degree of Operating Leverage Explanation

Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.

A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.

Be Aware

The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.


Wise Degree of Operating Leverage Related Terms

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


Wise Business Description

Industry
Traded in Other Exchanges
Address
56 Shoreditch High Street, 6th Floor, Tea Building, London, GBR, E1 6JJ
Wise is a currency conversion platform matching where possible offsetting currency transactions across borders to reduce costs. The group focuses primarily on private clients and small and midsize enterprises, but is building out its platform business aimed at providing its services as a backend solution to banks. By operating local accounts in each jurisdiction Wise sends money to or receives money from, this fintech offers faster and cheaper currency transfer services than incumbents (banks). Wise has started to broaden its product offering, issuing its clients debit cards and allowing customers to invest funds into various asset-management products.

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