BioNTech Current Debt
| 0A3M Stock | USD 119.25 1.31 1.09% |
BioNTech SE holds a debt-to-equity ratio of 0.046. Short and Long Term Debt is expected to rise to about 40.6 M this year, although the value of Long Term Debt will most likely fall to about 154 M. . BioNTech's financial risk is the risk to BioNTech stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
BioNTech's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. BioNTech's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps BioNTech Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect BioNTech's stakeholders.
For most companies, including BioNTech, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for BioNTech SE, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, BioNTech's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 1.4171 | Book Value 83.023 | Operating Margin 0.6395 | Profit Margin 0.4764 | Return On Assets 0.1692 |
BioNTech |
BioNTech SE Debt to Cash Allocation
Many companies such as BioNTech, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
BioNTech SE has accumulated 28.1 M in total debt with debt to equity ratio (D/E) of 0.05, which may suggest the company is not taking enough advantage from borrowing. BioNTech SE has a current ratio of 2.62, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist BioNTech until it has trouble settling it off, either with new capital or with free cash flow. So, BioNTech's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like BioNTech SE sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for BioNTech to invest in growth at high rates of return. When we think about BioNTech's use of debt, we should always consider it together with cash and equity.BioNTech Other Current Liab Over Time
BioNTech 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 BioNTech's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of BioNTech, which in turn will lower the firm's financial flexibility.BioNTech Long Term Debt
Long Term Debt |
|
Understaning BioNTech Use of Financial Leverage
Leverage ratios show BioNTech's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of BioNTech's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 191 M | 154 M | |
| Short and Long Term Debt | 28.1 M | 40.6 M |
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectCheck out the analysis of BioNTech Fundamentals Over Time. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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.