Enablence Technologies Debt

ENA Stock  CAD 1.91  0.00  0.00%   
Enablence Technologies holds a debt-to-equity ratio of 2.67. At this time, Enablence Technologies' Short Term Debt is fairly stable compared to the past year. Long Term Debt is likely to climb to about 25.9 M in 2025, whereas Short and Long Term Debt is likely to drop slightly above 587.8 K in 2025. . Enablence Technologies' financial risk is the risk to Enablence Technologies stockholders that is caused by an increase in debt.
88.5%

Asset vs Debt

27.3%

Equity vs Debt

Enablence Technologies' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Enablence Technologies' 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 Enablence Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Enablence Technologies' stakeholders.

Enablence Technologies Quarterly Net Debt

27.3 Million

100%
For most companies, including Enablence Technologies, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Enablence Technologies, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Enablence Technologies' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Book Value
(1.38)
Operating Margin
(5.06)
Return On Assets
(1.23)
Given that Enablence Technologies' 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 Enablence Technologies 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 Enablence Technologies to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Enablence Technologies is said to be less leveraged. If creditors hold a majority of Enablence Technologies' assets, the Company is said to be highly leveraged.
At this time, Enablence Technologies' Total Current Liabilities is fairly stable compared to the past year. Non Current Liabilities Total is likely to climb to about 26.7 M in 2025, despite the fact that Change To Liabilities is likely to grow to (548.1 K).
  
Check out the analysis of Enablence Technologies Fundamentals Over Time.

Enablence Technologies Debt to Cash Allocation

Many companies such as Enablence Technologies, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
Debt84.99%Cash15.01%100%
Enablence Technologies has accumulated 538 K in total debt with debt to equity ratio (D/E) of 2.67, implying the company greatly relies on financing operations through barrowing. Enablence Technologies has a current ratio of 0.09, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. Debt can assist Enablence Technologies until it has trouble settling it off, either with new capital or with free cash flow. So, Enablence Technologies' 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 Enablence Technologies sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Enablence to invest in growth at high rates of return. When we think about Enablence Technologies' use of debt, we should always consider it together with cash and equity.

Enablence Technologies Total Assets Over Time

2.21.61.41.46.04.13.73.4-26%-14%3%316%-31%-10%-9%100%

Enablence Technologies Assets Financed by Debt

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 Enablence Technologies' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Enablence Technologies, which in turn will lower the firm's financial flexibility.
100%
100%

Enablence Technologies Corporate Bonds Issued

Enablence Short Long Term Debt

Short Long Term Debt

587,765

11.0K3.5M13.4M20.9M27.2M35.2M486.0469.0538.0618.7587.8100%
At this time, Enablence Technologies' Short and Long Term Debt is fairly stable compared to the past year.

Understaning Enablence Technologies Use of Financial Leverage

Understanding the structure of Enablence Technologies' debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Enablence Technologies' 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
Short and Long Term Debt618.7 K587.8 K
Short Term Debt24 M25.2 M
Long Term Debt24.6 M25.9 M
Net Debt19.2 M15.2 M
Please read more on our technical analysis page.

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Additional Tools for Enablence Stock Analysis

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