Gryphon Digital Mining Corporate Bonds and Leverage Analysis

GRYP Stock   0.58  0.01  1.69%   
At this time, Gryphon Digital's Net Debt is relatively stable compared to the past year. As of 12/12/2024, Debt To Assets is likely to grow to 0.83, while Short Term Debt is likely to drop slightly above 9 M. . Gryphon Digital's financial risk is the risk to Gryphon Digital stockholders that is caused by an increase in debt.
 
Debt Ratio  
First Reported
2010-12-31
Previous Quarter
0.78942338
Current Value
0.83
Quarterly Volatility
0.24515306
 
Credit Downgrade
 
Yuan Drop
 
Covid
As of 12/12/2024, Total Current Liabilities is likely to drop to about 391.7 K. In addition to that, Liabilities And Stockholders Equity is likely to drop to about 17.9 M
  
Check out the analysis of Gryphon Digital Fundamentals Over Time.
View Bond Profile
Given the importance of Gryphon Digital's capital structure, the first step in the capital decision process is for the management of Gryphon Digital 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 Gryphon Digital Mining to issue bonds at a reasonable cost.

Gryphon Digital Bond Ratings

Gryphon Digital Mining financial ratings play a critical role in determining how much Gryphon Digital 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 Gryphon Digital's borrowing costs.
Piotroski F Score
4
PoorView
Beneish M Score
(4.09)
Unlikely ManipulatorView

Gryphon Digital Total Assets Over Time

Gryphon Digital Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Gryphon Digital 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.

Gryphon Digital Debt Ratio

    
  83.0   
It seems most of the Gryphon Digital's assets are financed through 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 Gryphon Digital's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Gryphon Digital, which in turn will lower the firm's financial flexibility.

Gryphon Digital Corporate Bonds Issued

Gryphon Short Long Term Debt Total

Short Long Term Debt Total

14.46 Million

At this time, Gryphon Digital's Short and Long Term Debt Total is relatively stable compared to the past year.

Understaning Gryphon Digital Use of Financial Leverage

Gryphon Digital's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Gryphon Digital's current equity. If creditors own a majority of Gryphon Digital's assets, the company is considered highly leveraged. Understanding the composition and structure of Gryphon Digital's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Short and Long Term Debt Total14.9 M14.5 M
Net Debt14 M14.7 M
Short and Long Term Debt15.2 MM
Short Term Debt14.9 MM
Long Term Debt1.3 M1.2 M
Net Debt To EBITDA(1.87)(1.78)
Debt To Equity(24.82)(23.58)
Interest Debt Per Share 0.60  0.57 
Debt To Assets 0.79  0.83 
Long Term Debt To Capitalization(0.47)(0.45)
Total Debt To Capitalization 1.04  0.59 
Debt Equity Ratio(24.82)(23.58)
Debt Ratio 0.79  0.83 
Cash Flow To Debt Ratio 0.20  0.21 
Please read more on our technical analysis page.

Pair Trading with Gryphon Digital

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Gryphon Digital position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gryphon Digital will appreciate offsetting losses from the drop in the long position's value.

Moving together with Gryphon Stock

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Moving against Gryphon Stock

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The ability to find closely correlated positions to Gryphon Digital could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Gryphon Digital when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Gryphon Digital - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Gryphon Digital Mining to buy it.
The correlation of Gryphon Digital is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Gryphon Digital moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Gryphon Digital Mining moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Gryphon Digital can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Additional Tools for Gryphon Stock Analysis

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