Canopy Growth (NAS:CGC) Degree of Financial Leverage

: 1.10 (As of Sep. 2023)

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Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). Canopy Growth's Degree of Financial Leverage for the quarter that ended in Sep. 2023 was 1.10. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Canopy Growth's Degree of Financial Leverage or its related term are showing as below:

CGC's Degree of Financial Leverage is ranked worse than
61.44% of 1053 companies
in the Drug Manufacturers industry
Industry Median: 0.97 vs CGC: 1.10

Canopy Growth Degree of Financial Leverage Historical Data

The historical data trend for Canopy Growth'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.

Canopy Growth Annual Data

Trend

Jul13

Dec14

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Degree of Financial Leverage

0.47

0.41

0.75

0.93

0.59

Canopy Growth 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																0.66	0.49	0.59	1.08	1.10

Competitive Comparison

For the Drug Manufacturers - Specialty & Generic subindustry, Canopy Growth'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.

Canopy Growth Degree of Financial Leverage Distribution

For the Drug Manufacturers industry and Healthcare sector, Canopy Growth's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where Canopy Growth's Degree of Financial Leverage falls into.

Canopy Growth Degree of Financial Leverage Calculation

Canopy Growth'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
	=	( -1.703 (Sep. 2023) / -5.929 (Sep. 2022) - 1 )	/	( -772.304 (Sep. 2023) / -2248.645 (Sep. 2022) - 1 )
	=	-0.7128	/	-0.6565
	=	1.09^***

** 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.

Canopy Growth (NAS:CGC) 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.

Canopy Growth Degree of Financial Leverage Related Terms

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

Canopy Growth (NAS:CGC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Canopy Growth Corp (NAS:CGC) » Definitions » Degree of Financial Leverage

Comparable Companies

Traded in Other Exchanges

11L1:Germany 11L1:Germany 11L1:Germany WEED:Canada

Address

1 Hershey Drive, Smiths Falls, ON, CAN, K7A 0A8

Website

https://www.canopygrowth.com

Canopy Growth, headquartered in Smiths Falls, Canada, cultivates and sells medicinal and recreational cannabis, and hemp, through a portfolio of brands that include Doja, 7ACRES, Tweed, and Deep Space. Its non-THC products include sports drink BioSteel, skincare products under This Works, Martha Stewart CBD, and Storz & Bickel vaporizers. Canopy growth is attempting to merge its U.S. assets into a separately operated holding company, Canopy USA, which will not be consolidated into the Canadian company's financials.

Executives

Christelle Gedeon	officer: See Remarks	3 HOLLYHOCK COURT, TORONTO Z4 M3B 0B4
Garth Hankinson	director	C/O CONSTELLATION BRANDS, INC., 207 HIGH POINT DRIVE, BLDG. 100, VICTOR NY 14564
Hong Judy Eun Joo	officer: See Remarks	1 HERSHEY DRIVE, SMITHS FALLS Z4 K7A 0A8
Greenstar Ii Holdings Llc	10 percent owner	207 HIGH POINT DRIVE, BUILDING 100, VICTOR NY 14564
Greenstar Ii Llc	10 percent owner	207 HIGH POINT DRIVE, BUILDING 100, VICTOR NY 14564
Grant Julious C. Jr	officer: Chief Commercial Officer	1 HERSHEY DRIVE, SMITHS FALLS A6 K7A 0A8
Sabia James A. Jr.	director	C/O CONSTELLATION BRANDS, INC., 207 HIGH POINT DRIVE, BLDG. 100, VICTOR NY 14564
Greenstar Canada Investment Limited Partnership	10 percent owner	1055 WEST HASTINGS STREET, SUITE 1700, VANCOUVER A1 V6E 2E9
Constellation Brands Canada Holdings Ulc	10 percent owner	QUEEN'S MARQUE, 600-1741 LOWER WATER STREET, HALIFAX A5 B3J 0J2
Theresa Yanofsky	director	1 HERSHEY DRIVE, SMITHS FALLS A6 K7A 0A8
Thomas Carlton Stewart	officer: See Remarks	1 HERSHEY DRIVE, SMITHS FALLS A6 K7A 0A8
Tomas Iv Shipley	officer: See Remarks	1 HERSHEY DRIVE, SMITHS FALLS A6 K7A 0A8
Cbg Holdings Llc	10 percent owner	207 HIGH POINT DRIVE, BUILDING 100, VICTOR NY 14564
Constellation Capital Llc	10 percent owner	207 HIGH POINT DRIVE, BUILDING 100, VICTOR NY 14564
Greenstar Canada Investment Corp	10 percent owner	1055 WEST HASTINGS STREET, SUITE 1700, VANCOUVER A1 V6E 2E9