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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). Elastic NV's Degree of Financial Leverage for the quarter that ended in Jan. 2024 was 2.03. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Elastic NV's Degree of Financial Leverage or its related term are showing as below:
The historical data trend for Elastic NV'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.
Elastic NV Annual Data | ||||||||||||||||
Trend | Apr17 | Apr18 | Apr19 | Apr20 | Apr21 | Apr22 | Apr23 | |||||||||
Degree of Financial Leverage | Get a 7-Day Free Trial | 0.87 | 0.40 | 1.08 | 1.06 | 1.54 |
Elastic NV Quarterly Data | ||||||||||||||||||||
Apr19 | Jul19 | Oct19 | Jan20 | Apr20 | Jul20 | Oct20 | Jan21 | Apr21 | Jul21 | Oct21 | Jan22 | Apr22 | Jul22 | Oct22 | Jan23 | Apr23 | Jul23 | Oct23 | Jan24 | |
Degree of Financial Leverage | Get a 7-Day Free Trial | 0.81 | 1.54 | 0.55 | 0.70 | 2.03 |
For the Software - Application subindustry, Elastic NV'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.
For the Software industry and Technology sector, Elastic NV's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Elastic NV's Degree of Financial Leverage falls into.
Elastic NV's Degree of Financial Leverage for the quarter that ended in Jan. 2024 is calculated as:
Degree of Financial Leverage | = | % Change in Earnings per Share (Diluted)** | / | % Change in EBIT |
= | ( 0.46 (Jan. 2024) / -2.7 (Jan. 2023) - 1 ) | / | ( -93.559 (Jan. 2024) / -220.748 (Jan. 2023) - 1 ) | |
= | -1.1704 | / | -0.5762 | |
= | 2.03*** |
* 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.
Elastic NV (NYSE:ESTC) 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.
Thank you for viewing the detailed overview of Elastic NV's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Alison Gleeson | director | C/O ELASTIC N.V., 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040 |
Shelley B Leibowitz | director | C/O MORGAN STANLEY, 1585 BROADWAY, NEW YORK NY 10036 |
Carolyn Herzog | officer: Chief Legal Officer | C/O ELASTIC N.V., 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040 |
Ken Exner | officer: Chief Product Officer | C/O ELASTIC NV, 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040 |
Ashutosh Kulkarni | officer: Chief Executive Officer | 6220 AMERICA CENTER DRIVE, SAN JOSE CA 95002 |
Shay Banon | director, 10 percent owner, officer: CEO and Chairman | C/O ELASTIC NV, 800 WEST EL CAMINO REAL SUITE 350, MOUNTAIN VIEW CA 94040 |
Janesh Moorjani | officer: Chief Financial Officer | C/O ELASTIC N.V., 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040 |
Chetan Puttagunta | director | 2855 SAND HILL ROAD, MENLO PARK CA 94025 |
Auvil Paul R. Iii | director | C/O PROOFPOINT, INC., 892 ROSS DRIVE, SUNNYVALE CA 94089 |
Sohaib Abbasi | director | 100 EAST DAVIE STREET, RALEIGH NC 27601 |
Jonathan Chadwick | director | 3401 HILLVIEW AVENUE, PALO ALTO CA 94304 |
Garrett W.h. Baird | officer: SVP and General Counsel | C/O ELASTIC N.V., 800 WEST EL CAMINO REAL SUITE 350, MOUNTAIN VIEW CA 94040 |
Peter H Fenton | director, 10 percent owner | 2480 SAND HILL ROAD, SUITE 200, MENLO PARK CA 94025 |
Paul Andrew Appleby | officer: President, Worldwide Field Ops | C/O ELASTIC N.V., 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040 |
Steven Schuurman | director, 10 percent owner | C/O ELASTIC NV, 800 WEST EL CAMINO REAL SUITE 350, MOUNTAIN VIEW CA 94040 |
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