Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
Apple's Degree of Financial Leverage for the quarter that ended in Sep. 2023 was -0.09. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Apple's Degree of Financial Leverage or its related term are showing as below:
AAPL's Degree of Financial Leverage is ranked better than 87.68% of 2427
companies
in the Hardware industry
Industry Median: 0.99
vs AAPL: -0.09
Apple Degree of Financial Leverage Historical Data
The historical data trend for Apple'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.
Apple Annual Data
Trend
Sep14
Sep15
Sep16
Sep17
Sep18
Sep19
Sep20
Sep21
Sep22
Sep23
Degree of Financial Leverage
0.04
11.11
1.19
0.98
-0.09
Apple Quarterly Data
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Sep22
Dec22
Mar23
Jun23
Sep23
Degree of Financial Leverage
0.98
1.04
0.82
0.41
-0.09
Competitive Comparison
For the Consumer Electronics subindustry, Apple'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.
Apple Degree of Financial Leverage Distribution
For the Hardware industry and Technology sector, Apple's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Apple's Degree of Financial Leverage falls into.
Apple Degree of Financial Leverage Calculation
Apple's Degree of Financial Leverage for the quarter that ended in Sep. 2023 is calculated as:
* 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.
Apple (NAS:AAPL) 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.
Apple Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of Apple's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and AirPods, among others. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Fitness, Apple Card, and Apple Pay, among others. Apple's products include internally developed software and semiconductors, and the firm is well known for its integration of hardware, software, semiconductors, and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers.
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