Consolidated Edison CONSOLIDATED Bond

EDC Stock  EUR 87.90  1.88  2.09%   
Consolidated Edison has over 20.15 Billion in debt which may indicate that it relies heavily on debt financing. . Consolidated Edison's financial risk is the risk to Consolidated Edison stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Consolidated Edison'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. Consolidated Edison'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 Consolidated Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Consolidated Edison's stakeholders.
For most companies, including Consolidated Edison, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Consolidated Edison, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Consolidated Edison's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
  
Check out the analysis of Consolidated Edison Fundamentals Over Time.
For more detail on how to invest in Consolidated Stock please use our How to Invest in Consolidated Edison guide.
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Given the importance of Consolidated Edison's capital structure, the first step in the capital decision process is for the management of Consolidated Edison 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 Consolidated Edison to issue bonds at a reasonable cost.
Popular NameConsolidated Edison CONSOLIDATED EDISON N
Equity ISIN CodeUS2091151041
Bond Issue ISIN CodeUS209111EM11
S&P Rating
Others
Maturity DateOthers
Issuance DateOthers
Coupon6.2 %
View All Consolidated Edison Outstanding Bonds

Consolidated Edison Outstanding Bond Obligations

Dana 575 percentUS235822AB96Details
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CONSOLIDATED EDISON NUS209111FF50Details
CONSOLIDATED EDISON NUS209111FE85Details
CONSOLIDATED EDISON NUS209111FD03Details
CONSOLIDATED EDISON NUS209111FC20Details
CONSOLIDATED EDISON NUS209111FB47Details
CONSOLIDATED EDISON NUS209111FJ72Details
CONSOLIDATED EDISON NUS209111FH17Details
CONSOLIDATED EDISON NUS209111FG34Details
CONSOLIDATED EDISON NUS209111EY58Details
CONSOLIDATED EDISON NUS209111FA63Details
CONSOLIDATED EDISON NUS209111ES80Details
CONSOLIDATED EDISON NUS209111EU37Details
CONSOLIDATED EDISON NUS209111EH26Details
US20914UAF30US20914UAF30Details
CONSOLIDATED EDISON NUS209111EM11Details
CONSOLIDATED EDISON NUS209111EL38Details
MPLX LP 4875US55336VAG59Details
Consolidated Energy 65US20914UAE64Details
CONSOLIDATED EDISON NUS209111EF69Details
CONSOLIDATED EDISON NUS209111ED12Details
MPLX LP 4125US55336VAK61Details
MPLX LP 52US55336VAL45Details
ED 52 01 MAR 33US209111GE76Details
ED 615 15 NOV 52US209111GD93Details
ED 32 01 DEC 51US209111GC11Details
CONSOLIDATED EDISON PANYUS209111GB38Details
CONSOLIDATED EDISON PANYUS209111GA54Details
US209111FV01US209111FV01Details
CONSOLIDATED EDISON NUS209111FT54Details
CONSOLIDATED EDISON NUS209111FS71Details
US209111FZ15US209111FZ15Details
CONSOLIDATED EDISON PANYUS209111FY40Details
US209111FX66US209111FX66Details
US209111FW83US209111FW83Details
CONSOLIDATED EDISON NUS209111FN84Details
CONSOLIDATED EDISON NUS209111FM02Details
CONSOLIDATED EDISON NUS209111FL29Details
CONSOLIDATED EDISON NUS209111FK46Details
CONSOLIDATED EDISON NUS209111FQ16Details
CONSOLIDATED EDISON NUS209111FP33Details
Morgan Stanley 3591US61744YAK47Details
Morgan Stanley 3971US61744YAL20Details
MGM Resorts InternationalUS552953CD18Details
Valero Energy PartnersUS91914JAA07Details

Understaning Consolidated Edison Use of Financial Leverage

Consolidated Edison's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Consolidated Edison's total debt position, including all outstanding debt obligations, and compares it with Consolidated Edison's equity. Financial leverage can amplify the potential profits to Consolidated Edison's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Consolidated Edison is unable to cover its debt costs.
Consolidated Edison, Inc., through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses in the United States. Consolidated Edison, Inc. was founded in 1884 and is based in New York, New York. CONSOLIDATED EDISON operates under Utilities - Regulated Electric classification in Germany and is traded on Frankfurt Stock Exchange. It employs 15307 people.
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Additional Information and Resources on Investing in Consolidated Stock

When determining whether Consolidated Edison is a strong investment it is important to analyze Consolidated Edison'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 Consolidated Edison's future performance. For an informed investment choice regarding Consolidated Stock, refer to the following important reports:
Check out the analysis of Consolidated Edison Fundamentals Over Time.
For more detail on how to invest in Consolidated Stock please use our How to Invest in Consolidated Edison guide.
You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
Please note, there is a significant difference between Consolidated Edison's value and its price as these two are different measures arrived at by different means. Investors typically determine if Consolidated Edison is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Consolidated Edison's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

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.