Earthstone Energy (Earthstone Energy) Degree of Financial Leverage : 6.03 (As of Sep. 2023)

Earthstone Energy Degree of Financial Leverage Chart

Earthstone Energy Annual Data
	Trend	Mar13	Mar14	Dec15	Dec16	Dec17	Dec18	Dec19	Dec20	Dec21	Dec22
Degree of Financial Leverage		Get a 7-Day Free Trial					1.34	1.09	6.61	0.57	0.58

Earthstone Energy 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	Get a 7-Day Free Trial															0.25	0.58	0.92	0.69	6.03

Competitive Comparison of Earthstone Energy's Degree of Financial Leverage

For the Oil & Gas E&P subindustry, Earthstone Energy'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.

Earthstone Energy's Degree of Financial Leverage Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Earthstone Energy's Degree of Financial Leverage distribution charts can be found below:

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

Earthstone Energy Degree of Financial Leverage Calculation

Earthstone Energy'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.

Earthstone Energy  (NYSE:ESTE) 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.

Earthstone Energy Degree of Financial Leverage Related Terms

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

Earthstone Energy (Earthstone Energy) Business Description