Dorchester Minerals Debt

DMLP Stock  USD 29.71  0.07  0.24%   
Dorchester Minerals holds a debt-to-equity ratio of 0.01. At this time, Dorchester Minerals' Short Term Debt is relatively stable compared to the past year. As of 03/15/2025, Short and Long Term Debt Total is likely to grow to about 1.4 M, while Debt To Equity is likely to drop 0. . Dorchester Minerals' financial risk is the risk to Dorchester Minerals stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Dorchester Minerals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Dorchester Minerals' 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 Dorchester Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Dorchester Minerals' stakeholders.
For most companies, including Dorchester Minerals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Dorchester Minerals LP, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Dorchester Minerals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
3.8784
Book Value
8.391
Operating Margin
0.681
Profit Margin
0.6669
Return On Assets
0.2388
At this time, Dorchester Minerals' Total Current Liabilities is relatively stable compared to the past year. As of 03/15/2025, Liabilities And Stockholders Equity is likely to grow to about 385.2 M, while Non Current Liabilities Total is likely to drop slightly above 668.6 K.
  
Check out the analysis of Dorchester Minerals Fundamentals Over Time.

Dorchester Minerals Bond Ratings

Dorchester Minerals LP financial ratings play a critical role in determining how much Dorchester Minerals have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Dorchester Minerals' borrowing costs.
Piotroski F Score
7
StrongView
Beneish M Score
(3.42)
Unlikely ManipulatorView

Dorchester Minerals Debt to Cash Allocation

Dorchester Minerals LP currently holds 1.04 M in liabilities with Debt to Equity (D/E) ratio of 0.01, which may suggest the company is not taking enough advantage from borrowing. Dorchester Minerals has a current ratio of 16.29, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Dorchester Minerals' use of debt, we should always consider it together with its cash and equity.

Dorchester Minerals Total Assets Over Time

Dorchester Minerals Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Dorchester Minerals 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.

Dorchester Minerals Debt Ratio

    
  0.27   
It seems most of the Dorchester Minerals' assets are financed through equity. 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 Dorchester Minerals' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Dorchester Minerals, which in turn will lower the firm's financial flexibility.

Dorchester Minerals Corporate Bonds Issued

Understaning Dorchester Minerals Use of Financial Leverage

Dorchester Minerals' financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Dorchester Minerals' current equity. If creditors own a majority of Dorchester Minerals' assets, the company is considered highly leveraged. Understanding the composition and structure of Dorchester Minerals' outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Net Debt-41.5 M-39.4 M
Short Term Debt263 K294.7 K
Short and Long Term Debt TotalM1.4 M
Net Debt To EBITDA(0.31)(0.32)
Interest Debt Per Share 0.03  0.02 
Cash Flow To Debt Ratio 127.54  133.91 
Please read more on our technical analysis page.

Additional Tools for Dorchester Stock Analysis

When running Dorchester Minerals' price analysis, check to measure Dorchester Minerals' 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 Dorchester Minerals is operating at the current time. Most of Dorchester Minerals' value examination focuses on studying past and present price action to predict the probability of Dorchester Minerals' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Dorchester Minerals' price. Additionally, you may evaluate how the addition of Dorchester Minerals 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.