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Activia Properties (TSE:3279) Degree of Financial Leverage : 1.23 (As of Nov. 2023)


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What is Activia Properties Degree of Financial Leverage?

Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). Activia Properties's Degree of Financial Leverage for the quarter that ended in Nov. 2023 was 1.23. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

TSE:3279's Degree of Financial Leverage is ranked worse than
59.73% of 678 companies
in the REITs industry
Industry Median: 1.08 vs TSE:3279: 1.23

Activia Properties Degree of Financial Leverage Historical Data

The historical data trend for Activia Properties'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.

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Activia Properties Degree of Financial Leverage Chart

Activia Properties Annual Data
Trend Nov14 Nov15 Nov16 Nov17 Nov18 Nov19 Nov20 Nov21 Nov22 Nov23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.39 1.22 0.28 -0.05 1.23

Activia Properties Semi-Annual Data
May14 Nov14 May15 Nov15 May16 Nov16 May17 Nov17 May18 Nov18 May19 Nov19 May20 Nov20 May21 Nov21 May22 Nov22 May23 Nov23
Degree of Financial Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.28 0.23 -0.05 0.84 1.23

Competitive Comparison of Activia Properties's Degree of Financial Leverage

For the REIT - Diversified subindustry, Activia Properties'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.


Activia Properties's Degree of Financial Leverage Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Activia Properties's Degree of Financial Leverage distribution charts can be found below:

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



Activia Properties Degree of Financial Leverage Calculation

Activia Properties's Degree of Financial Leverage for the quarter that ended in Nov. 2023 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 21630.4 (Nov. 2023) / 19106 (Nov. 2022) - 1 )/( 18968.714 (Nov. 2023) / 17135.051 (Nov. 2022) - 1 )
=0.1321/0.107
=1.23***

* 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.


Activia Properties  (TSE:3279) 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.


Activia Properties Degree of Financial Leverage Related Terms

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


Activia Properties (TSE:3279) Business Description

Industry
Traded in Other Exchanges
N/A
Address
1-16-3 Dogenzaka, Shibuya-ku, Tokyo, JPN, 150-0043
Activia Properties Inc, or API, is a Japanese real estate investment trust principally involved in the ownership of properties in the Greater Tokyo area. Most of these properties are either urban retail units near major train stations, corporate office properties, or other popular areas in Tokyo. API derives the vast majority of its income in the form of rental revenue from its real estate holdings. Its urban retail properties encompass the larger overall share of these holdings. The company's major tenants include the Tokyu Land Corporation, a Japanese railway operator. Tokyu Land Corp is also the controlling shareholder of the firm that works with Activia through an asset management agreement, TLC Activia Investment Management Inc.

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