Advanced Drainage Systems Valero Bond
6DA Stock | EUR 110.60 0.60 0.55% |
Advanced Drainage Systems has over 908.71 Million in debt which may indicate that it relies heavily on debt financing. . Advanced Drainage's financial risk is the risk to Advanced Drainage stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Advanced Drainage'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. Advanced Drainage'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 Advanced Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Advanced Drainage's stakeholders.
For most companies, including Advanced Drainage, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Advanced Drainage Systems, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Advanced Drainage's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
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Given the importance of Advanced Drainage's capital structure, the first step in the capital decision process is for the management of Advanced Drainage to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Advanced Drainage Systems to issue bonds at a reasonable cost.
Popular Name | Advanced Drainage Valero Energy Partners |
Equity ISIN Code | US00790R1041 |
Bond Issue ISIN Code | US91914JAA07 |
S&P Rating | Others |
Maturity Date | 15th of December 2026 |
Issuance Date | 9th of December 2016 |
Coupon | 4.375 % |
Advanced Drainage Systems Outstanding Bond Obligations
Dana 575 percent | US235822AB96 | Details | |
Volcan Compania Minera | USP98047AC08 | Details | |
Boeing Co 2196 | US097023DG73 | Details | |
Advanced Drainage Systems | US00790RAA23 | Details | |
WMS 6375 15 JUN 30 | US00790RAB06 | Details | |
MPLX LP 4875 | US55336VAG59 | Details | |
MPLX LP 4125 | US55336VAK61 | Details | |
MPLX LP 52 | US55336VAL45 | Details | |
ADVISOR GROUP HLDGS | US00791GAA58 | Details | |
Morgan Stanley 3591 | US61744YAK47 | Details | |
Morgan Stanley 3971 | US61744YAL20 | Details | |
MGM Resorts International | US552953CD18 | Details | |
Valero Energy Partners | US91914JAA07 | Details | |
AMD 4393 01 JUN 52 | US007903BG12 | Details | |
AMD 3924 01 JUN 32 | US007903BF39 | Details | |
US007944AF80 | US007944AF80 | Details |
Understaning Advanced Drainage Use of Financial Leverage
Advanced Drainage's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Advanced Drainage's total debt position, including all outstanding debt obligations, and compares it with Advanced Drainage's equity. Financial leverage can amplify the potential profits to Advanced Drainage's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Advanced Drainage is unable to cover its debt costs.
Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products, and drainage solutions for use in the underground construction and infrastructure marketplace in the United States and internationally. Advanced Drainage Systems, Inc. was founded in 1966 and is headquartered in Hilliard, Ohio. Advanced Drainage operates under Rubber Plastics classification in Germany and is traded on Frankfurt Stock Exchange. It employs 4400 people. Please read more on our technical analysis page.
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Additional Information and Resources on Investing in Advanced Stock
When determining whether Advanced Drainage Systems is a strong investment it is important to analyze Advanced Drainage's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Advanced Drainage's future performance. For an informed investment choice regarding Advanced Stock, refer to the following important reports:Check out the analysis of Advanced Drainage Fundamentals Over Time. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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.