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MGRC (McGrath RentCorp) Degree of Operating Leverage : 9.74 (As of Mar. 2025)


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What is McGrath RentCorp Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. McGrath RentCorp's Degree of Operating Leverage for the quarter that ended in Mar. 2025 was 9.74. The higher Degree of Operating Leverage, the higher operating risk the company will take.

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

MGRC's Degree of Operating Leverage is ranked worse than
86.99% of 999 companies
in the Business Services industry
Industry Median: 0.97 vs MGRC: 9.74

McGrath RentCorp Degree of Operating Leverage Historical Data

The historical data trend for McGrath RentCorp'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.

McGrath RentCorp Degree of Operating Leverage Chart

McGrath RentCorp Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
Degree of Operating Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only -1.09 1.80 0.97 0.95 9.46

McGrath RentCorp Quarterly Data
Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24 Mar25
Degree of Operating 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 1.86 1.66 7.83 9.46 9.74

Competitive Comparison of McGrath RentCorp's Degree of Operating Leverage

For the Rental & Leasing Services subindustry, McGrath RentCorp'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.


McGrath RentCorp's Degree of Operating Leverage Distribution in the Business Services Industry

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

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


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McGrath RentCorp Degree of Operating Leverage Calculation

McGrath RentCorp's Degree of Operating Leverage for the quarter that ended in Mar. 2025 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 363.864 (Mar. 2025) / 212.526 (Mar. 2024) - 1 )/( 918.531 (Mar. 2025) / 855.951 (Mar. 2024) - 1 )
=0.7121/0.0731
=9.74***

* 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.


McGrath RentCorp  (NAS:MGRC) 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.


McGrath RentCorp Degree of Operating Leverage Related Terms

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


McGrath RentCorp Business Description

Traded in Other Exchanges
N/A
Address
5700 Las Positas Road, Livermore, CA, USA, 94551-7800
McGrath RentCorp is a rental company. It is comprised of four reportable business segments namely Modular building segment (Mobile Modular); Portable storage container segment (Portable Storage); Electronic test equipment segment (TRS-RenTelco); and its classroom manufacturing business selling modular buildings used primarily as classrooms in California (Enviroplex). The company generates its revenues majorily from the rental of its equipment on operating leases with sales of equipment occurring in the normal course of business.
Executives
Keith E Pratt officer: Executive VP and CFO
John P Skenesky officer: VP and Division Manager 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
Joseph F Hanna director, officer: President & CEO
Philip B Hawkins officer: VP & Division Manager 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
Kimberly Ann Box director 7157 TREELINE CT., GRANITE BAY CA 95746
Gilda Malek officer: VP, Legal General Counsel C/O MCGRATH RENTCORP, 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
David M Whitney officer: VP, Controller, PAO 5700 LOS POSITAS ROAD, LIVERMORE CA 94551
Trease Kristina Van officer: VP & Division Manager 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
Tara Wescott officer: Vice President Human Resources C/O MCGRATH RENTCORP, 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
William J Dawson director C/O CERUS CORPORATION, 2411 STANWELL DRIVE, CONCORD CA 94520
Elizabeth A Fetter director 1400 MARINA WAY SOUTH, RICHMOND CA 94804
John Lieffrig officer: VP & Division Manager C/O MCGRATH RENTCORP, 5700 LAS POSITAS ROAD, LIVERMORE CA 94551
Dennis P Stradford director
Nicolas C Anderson director 3100 ZINFANDEL DRIVE, STE. 450, RANCHO CORDOVA CA 95670
Stuart Templeton Porter officer: VP & Division Manager C/O MCGRATH RENTCORP, 5700 LAS POSITAS ROAD, LIVERMORE CA 94551