Xinxiang Chemical Debt
000949 Stock | 4.54 0.15 3.20% |
At present, Xinxiang Chemical's Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt is expected to grow to about 3.9 B, whereas Short and Long Term Debt is forecasted to decline to about 744 M. With a high degree of financial leverage come high-interest payments, which usually reduce Xinxiang Chemical's Earnings Per Share (EPS).
At present, Xinxiang Chemical's Total Current Liabilities is projected to increase significantly based on the last few years of reporting. The current year's Liabilities And Stockholders Equity is expected to grow to about 12.6 B, whereas Non Current Liabilities Other is forecasted to decline to about 1.4 B. Xinxiang |
Xinxiang Chemical Total Assets Over Time
Xinxiang Chemical Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Xinxiang Chemical's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Xinxiang Chemical, which in turn will lower the firm's financial flexibility.Xinxiang Chemical Corporate Bonds Issued
Most Xinxiang bonds can be classified according to their maturity, which is the date when Xinxiang Chemical Fiber has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Xinxiang Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning Xinxiang Chemical Use of Financial Leverage
Xinxiang Chemical's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Xinxiang Chemical's total debt position, including all outstanding debt obligations, and compares it with Xinxiang Chemical's equity. Financial leverage can amplify the potential profits to Xinxiang Chemical's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Xinxiang Chemical is unable to cover its debt costs.
Last Reported | Projected for Next Year | ||
Short and Long Term Debt Total | 5 B | 5.2 B | |
Net Debt | 3.7 B | 3.9 B | |
Short Term Debt | 2.5 B | 2.6 B | |
Long Term Debt | 2.5 B | 2.7 B | |
Short and Long Term Debt | 811.7 M | 744 M |
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.Other Information on Investing in Xinxiang Stock
Xinxiang Chemical financial ratios help investors to determine whether Xinxiang Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Xinxiang with respect to the benefits of owning Xinxiang Chemical security.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.