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Aon (AON) Degree of Financial Leverage : 1.19 (As of Dec. 2023)


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What is Aon 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). Aon's Degree of Financial Leverage for the quarter that ended in Dec. 2023 was 1.19. The higher Degree of Financial Leverage, the more volatile earnings will be.

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

AON's Degree of Financial Leverage is ranked worse than
67.82% of 348 companies
in the Insurance industry
Industry Median: 0.96 vs AON: 1.19

Aon Degree of Financial Leverage Historical Data

The historical data trend for Aon'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.

Aon Degree of Financial Leverage Chart

Aon Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.91 1.14 1.76 2.04 1.19

Aon Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 2.04 1.93 1.71 -0.65 1.19

Competitive Comparison of Aon's Degree of Financial Leverage

For the Insurance Brokers subindustry, Aon'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.


Aon's Degree of Financial Leverage Distribution in the Insurance Industry

For the Insurance industry and Financial Services sector, Aon's Degree of Financial Leverage distribution charts can be found below:

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



Aon Degree of Financial Leverage Calculation

Aon's Degree of Financial Leverage for the quarter that ended in Dec. 2023 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 12.51 (Dec. 2023) / 12.14 (Dec. 2022) - 1 )/( 3653 (Dec. 2023) / 3562 (Dec. 2022) - 1 )
=0.0305/0.0255
=1.19***

* 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.


Aon  (NYSE:AON) 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.


Aon Degree of Financial Leverage Related Terms

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


Aon (AON) Business Description

Industry
Traded in Other Exchanges
Address
James Joyce Street, Metropolitan Building, Dublin 1, IRL, D01 K0Y8
Aon is a leading global provider of insurance and reinsurance brokerage and human resource solutions. Its operations are tilted toward its brokerage operations. Headquartered in London, Aon has about 50,000 employees and operations in over 120 countries around the world.
Executives
Byron Spruell director 200 EAST RANDOLPH ST., CHICAGO IL 60601
Eric Andersen officer: CEO, Aon Benfield 200 EAST RANDOLPH ST., CHICAGO IL 60601
Sarah G Smith director C/O GOLDMAN SACHS & CO. LLC, 200 WEST STREET, NEW YORK NY 10282
Christa Davies officer: EVP, Global Finance AON CORPORATE LAW DEPT, 200 EAST RANDOLPH ST, 8TH FL, CHICAGO IL 60601
Michael Neller officer: Principal Accounting Officer 200 EAST RANDOLPH ST., CHICAGO IL 60601
Mindy F. Simon officer: Chief Operating Officer FOUR EMBARCADERO CENTER, SUITE 2100, SAN FRANCISCO CA 94111
Adriana Karaboutis director C/O BIOGEN IDEC INC., 225 BINNEY ST., CAMBRIDGE MA 02142
Darren Zeidel officer: General Counsel 200 EAST RANDOLPH ST., CHICAGO IL 60640
Lester B Knight director C/O AON CORP, 200 EAST RANDOLPH STREET, CHICAGO IL 60601
Jillian Slyfield officer: Chief Innovation Officer 200 E RANDOLPH ST., CHICAGO IL 60601
J Michael Losh director H.B. FULLER COMPANY, P.O. BOX 64683, ST. PAUL MN 55164-0683
James Platt officer: Chief Operating Officer THE LEADENHALL BUILDING, 122 LEADENHALL ST., LONDON X0 EC3V 4AN
John G Bruno officer: Executive Vice President, CIO
Carolyn Y Woo director 801 E. 86TH AVENUE, MERRILLVILLE IN 4641-
Anthony R Goland officer: EVP and CHRO C/O AON LAW DEPARTMENT, 200 EAST RANDOLPH ST, CHICAGO IL 60601

Aon (AON) Headlines

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