Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
Shell Midstream Partners LP's Degree of Financial Leverage for the quarter that ended in Jun. 2022 was 0.00. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Shell Midstream Partners LP's Degree of Financial Leverage or its related term are showing as below:
SHLX's Degree of Financial Leverage is not ranked *
in the Oil & Gas industry.
Industry Median: 1.00 * Ranked among companies with meaningful Degree of Financial Leverage only.
Shell Midstream Partners LP Degree of Financial Leverage Historical Data
The historical data trend for Shell Midstream Partners LP'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.
Shell Midstream Partners LP Annual Data
Trend
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Degree of Financial Leverage
-0.38
0.57
0.66
-21.55
-2.56
Shell Midstream Partners LP Quarterly Data
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Degree of Financial Leverage
-7.75
-0.93
-2.56
0.87
1.01
Competitive Comparison
For the Oil & Gas Midstream subindustry, Shell Midstream Partners LP'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.
Shell Midstream Partners LP Degree of Financial Leverage Distribution
For the Oil & Gas industry and Energy sector, Shell Midstream Partners LP's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Shell Midstream Partners LP's Degree of Financial Leverage falls into.
Shell Midstream Partners LP Degree of Financial Leverage Calculation
Shell Midstream Partners LP's Degree of Financial Leverage for the quarter that ended in Jun. 2022 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.
Shell Midstream Partners LP (NYSE:SHLX) 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.
Shell Midstream Partners LP Degree of Financial Leverage Related Terms
Thank you for viewing the detailed overview of Shell Midstream Partners LP's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.
Shell Midstream Partners LP (NYSE:SHLX) Business Description
Shell Midstream Partners LP is a US-based limited partnership that is formed to own, operate, develop and acquire pipelines and other midstream assets. The company holds an interest in several entities which own crude oil, refined products and natural gas pipelines, and crude tank storage and terminal system. It provides a transportation and storage facility to deliver refined products from Gulf Coast markets to demand centers. The company earns revenue through the long-term transportation agreements by charging fees for the transportation of crude oil and refined products through its pipelines.
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