What is Valassis Communications Degree of Operating Leverage?
Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Valassis Communications's Degree of Operating Leverage for the quarter that ended in Sep. 2013 was 0.00. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Valassis Communications's Degree of Operating Leverage or its related term are showing as below:
FRA:VAA's Degree of Operating Leverage is not ranked *
in the Media - Diversified industry.
Industry Median: 1.22 * Ranked among companies with meaningful Degree of Operating Leverage only.
Valassis Communications Degree of Operating Leverage Historical Data
The historical data trend for Valassis Communications'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.
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Valassis Communications Degree of Operating Leverage Chart
Competitive Comparison of Valassis Communications's Degree of Operating Leverage
For the Advertising Agencies subindustry, Valassis Communications'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.
Valassis Communications's Degree of Operating Leverage Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Valassis Communications's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Valassis Communications's Degree of Operating Leverage falls into.
* 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.
Valassis Communications (FRA:VAA) 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.
Valassis Communications Degree of Operating Leverage Related Terms
Thank you for viewing the detailed overview of Valassis Communications's Degree of Operating Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Valassis Communications Inc is a Delaware Corporation. The Company is an intelligent media delivery, providing over 15,000 advertisers proven and innovative media solutions to influence consumers wherever they plan, shop, buy and share. By integrating online and offline data combined with powerful insights, Valassis precisely targets its clients' valuable shoppers, offering unparalleled reach and scale. It operates its business in three reportable segments: Shared Mail - offer the only national shared mail distribution network in the industry with products that have the ability to reach 9 out of 10 U.S. households through shared mail distribution. Neighborhood Targeted - Products that are targeted to specific newspaper zones or neighborhoods based on geographic and demographic characteristics. The Company specializes in producing full-service promotions for clients allowing orders to be placed on a national, regional or local basis. Free-standing Inserts - Four-color booklets that contain promotions, mainly coupons, from multiple advertisers (cooperative), which it publish and distribute to approximately 60 million households through newspapers and shared mail. Cooperative Free-standing Inserts ('FSI') are four-color booklets containing promotions, primarily coupons, from multiple clients, printed by the Company at its own facilities and distributed through newspapers and shared mail. Paper is the main raw material essential to its business. The extent and nature of the competition are, in large part, determined by location and demographics of the markets targeted by a particular advertiser and the number of media alternatives in those markets.
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