Chesapeake Gold Corp F1R15XK36 Bond

CKG Stock  CAD 1.03  0.06  5.50%   
Chesapeake Gold Corp holds a debt-to-equity ratio of 0.004. At this time, Chesapeake Gold's Net Debt To EBITDA is fairly stable compared to the past year. Debt To Equity is likely to climb to 0.01 in 2024, whereas Short and Long Term Debt Total is likely to drop slightly above 699.1 K in 2024. . Chesapeake Gold's financial risk is the risk to Chesapeake Gold stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Chesapeake Gold'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. Chesapeake Gold'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 Chesapeake Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Chesapeake Gold's stakeholders.
For most companies, including Chesapeake Gold, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Chesapeake Gold Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Chesapeake Gold'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
0.5075
Book Value
2.212
Return On Assets
(0.02)
Return On Equity
(0.04)
At this time, Chesapeake Gold's Total Current Liabilities is fairly stable compared to the past year. Change To Liabilities is likely to climb to about 455.2 K in 2024, whereas Liabilities And Stockholders Equity is likely to drop slightly above 99.4 M in 2024.
  
Check out the analysis of Chesapeake Gold Fundamentals Over Time.
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Given the importance of Chesapeake Gold's capital structure, the first step in the capital decision process is for the management of Chesapeake Gold 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 Chesapeake Gold Corp to issue bonds at a reasonable cost.
Popular NameChesapeake Gold BNP Paribas FRN
SpecializationOther Precious Metals & Mining
Equity ISIN CodeCA1651841027
Bond Issue ISIN CodeUSF1R15XK367
S&P Rating
Others
Maturity Date31st of December 99
Issuance DateOthers
View All Chesapeake Gold Outstanding Bonds

Chesapeake Gold Corp Outstanding Bond Obligations

Understaning Chesapeake Gold Use of Financial Leverage

Understanding the structure of Chesapeake Gold's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Chesapeake Gold's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
Last ReportedProjected for Next Year
Net Debt-19.8 M-20.8 M
Short and Long Term Debt Total805 K699.1 K
Short and Long Term Debt630 K572.7 K
Short Term Debt630 K573.5 K
Net Debt To EBITDA 4.67  4.91 
Debt To Equity 0.00  0.01 
Total Debt To Capitalization 0.00  0.01 
Debt Equity Ratio 0.00  0.01 
Cash Flow To Debt Ratio(3.35)(3.52)
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Additional Tools for Chesapeake Stock Analysis

When running Chesapeake Gold's price analysis, check to measure Chesapeake Gold's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Chesapeake Gold is operating at the current time. Most of Chesapeake Gold's value examination focuses on studying past and present price action to predict the probability of Chesapeake Gold's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Chesapeake Gold's price. Additionally, you may evaluate how the addition of Chesapeake Gold to your portfolios can decrease your overall portfolio volatility.

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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.