Cronos Debt
| CRON Stock | CAD 2.72 0.07 2.51% |
Cronos Group holds a debt-to-equity ratio of 0.006. At this time, Cronos' Short and Long Term Debt is very stable compared to the past year. As of the 19th of December 2024, Long Term Debt is likely to grow to about 5 M, though Net Debt is likely to grow to (633.4 M). With a high degree of financial leverage come high-interest payments, which usually reduce Cronos' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Cronos' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Cronos' 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 Cronos Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Cronos' stakeholders.
For most companies, including Cronos, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Cronos Group, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Cronos' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 0.6927 | Book Value 2.884 | Operating Margin (0.54) | Profit Margin (0.56) | Return On Assets (0.04) |
Given that Cronos' debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Cronos is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Cronos to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Cronos is said to be less leveraged. If creditors hold a majority of Cronos' assets, the Company is said to be highly leveraged.
At this time, Cronos' Total Current Liabilities is very stable compared to the past year. As of the 19th of December 2024, Non Current Liabilities Total is likely to grow to about 4.5 M, while Liabilities And Stockholders Equity is likely to drop about 809.1 M. Cronos |
Cronos Group Debt to Cash Allocation
Cronos Group has accumulated 2.55 M in total debt with debt to equity ratio (D/E) of 0.01, which may suggest the company is not taking enough advantage from borrowing. Cronos Group has a current ratio of 4.27, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Cronos until it has trouble settling it off, either with new capital or with free cash flow. So, Cronos' 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 Cronos Group sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Cronos to invest in growth at high rates of return. When we think about Cronos' use of debt, we should always consider it together with cash and equity.Cronos Total Assets Over Time
Cronos Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Cronos uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Cronos Debt Ratio | 5.96 |
Cronos Corporate Bonds Issued
Cronos Net Debt
Understaning Cronos Use of Financial Leverage
Leverage ratios show Cronos' 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 Cronos' 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 | ||
| Net Debt | -666.7 M | -633.4 M | |
| Short and Long Term Debt Total | 2.6 M | 2.4 M | |
| Short and Long Term Debt | 17.7 M | 18.6 M | |
| Short Term Debt | 994 K | 944.3 K | |
| Long Term Debt | 4.7 M | 5 M | |
| Net Debt To EBITDA | 9.29 | 9.75 | |
| Debt To Equity | 0.09 | 0.07 | |
| Interest Debt Per Share | 0.07 | 0.07 | |
| Debt To Assets | 0.07 | 0.06 | |
| Long Term Debt To Capitalization | 0.05 | 0.04 | |
| Total Debt To Capitalization | 0.08 | 0.07 | |
| Debt Equity Ratio | 0.09 | 0.07 | |
| Debt Ratio | 0.07 | 0.06 | |
| Cash Flow To Debt Ratio | (0.42) | (0.44) |
Check out the analysis of Cronos Fundamentals Over Time. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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.