Goosehead Insurance Debt
| GSHD Stock | USD 126.12 0.38 0.30% |
Goosehead Insurance holds a debt-to-equity ratio of -1.216. At present, Goosehead Insurance's Short and Long Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 19.2 M, whereas Net Debt is forecasted to decline to about 83.8 M. . Goosehead Insurance's financial risk is the risk to Goosehead Insurance stockholders that is caused by an increase in debt.
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.2167899 | Current Value 0.21 | Quarterly Volatility 1.4697694 |
Given that Goosehead Insurance's 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 Goosehead Insurance 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 Goosehead Insurance to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Goosehead Insurance is said to be less leveraged. If creditors hold a majority of Goosehead Insurance's assets, the Company is said to be highly leveraged.
At present, Goosehead Insurance's Liabilities And Stockholders Equity is projected to increase significantly based on the last few years of reporting. The current year's Non Current Liabilities Total is expected to grow to about 312.1 M, whereas Non Current Liabilities Other is forecasted to decline to about 61.3 M. Goosehead |
Goosehead Insurance Bond Ratings
Goosehead Insurance financial ratings play a critical role in determining how much Goosehead Insurance 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 Goosehead Insurance's borrowing costs.| Piotroski F Score | 4 | Poor | View |
| Beneish M Score | (2.66) | Unlikely Manipulator | View |
Goosehead Insurance Debt to Cash Allocation
Many companies such as Goosehead Insurance, 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.
Goosehead Insurance currently holds 143.22 M in liabilities. Goosehead Insurance has a current ratio of 1.91, which is within standard range for the sector. Note, when we think about Goosehead Insurance's use of debt, we should always consider it together with its cash and equity.Goosehead Insurance Total Assets Over Time
Goosehead Insurance Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Goosehead Insurance 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.Goosehead Insurance Debt Ratio | 21.0 |
Goosehead Insurance Corporate Bonds Issued
Most Goosehead bonds can be classified according to their maturity, which is the date when Goosehead Insurance has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Goosehead Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Goosehead Insurance Use of Financial Leverage
Goosehead Insurance's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Goosehead Insurance's total debt position, including all outstanding debt obligations, and compares it with Goosehead Insurance's equity. Financial leverage can amplify the potential profits to Goosehead Insurance's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Goosehead Insurance is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 143.2 M | 108.6 M | |
| Net Debt | 101.3 M | 83.8 M | |
| Long Term Debt | 67.6 M | 71.1 M | |
| Long Term Debt Total | 91.3 M | 57.2 M | |
| Short and Long Term Debt | 9.4 M | 9.8 M | |
| Short Term Debt | 18.3 M | 19.2 M | |
| Net Debt To EBITDA | 2.21 | 3.44 | |
| Debt To Equity | 1.36 | 1.43 | |
| Interest Debt Per Share | 3.49 | 3.36 | |
| Debt To Assets | 0.22 | 0.21 | |
| Long Term Debt To Capitalization | 0.54 | 0.52 | |
| Total Debt To Capitalization | 0.58 | 0.55 | |
| Debt Equity Ratio | 1.36 | 1.43 | |
| Debt Ratio | 0.22 | 0.21 | |
| Cash Flow To Debt Ratio | 0.66 | 0.69 |
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether Goosehead Insurance is a strong investment it is important to analyze Goosehead Insurance'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 Goosehead Insurance's future performance. For an informed investment choice regarding Goosehead Stock, refer to the following important reports:Check out the analysis of Goosehead Insurance Fundamentals Over Time. For information on how to trade Goosehead Stock refer to our How to Trade Goosehead Stock guide.You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Is Insurance Brokers space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Goosehead Insurance. If investors know Goosehead will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Goosehead Insurance listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.051 | Earnings Share 0.7 | Revenue Per Share 11.444 | Quarterly Revenue Growth 0.1 | Return On Assets 0.0637 |
The market value of Goosehead Insurance is measured differently than its book value, which is the value of Goosehead that is recorded on the company's balance sheet. Investors also form their own opinion of Goosehead Insurance's value that differs from its market value or its book value, called intrinsic value, which is Goosehead Insurance's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Goosehead Insurance's market value can be influenced by many factors that don't directly affect Goosehead Insurance's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Goosehead Insurance's value and its price as these two are different measures arrived at by different means. Investors typically determine if Goosehead Insurance is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Goosehead Insurance'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.