Innovation1 Biotech Current Debt
| IVBT Stock | USD 0 0.00 0.00% |
Innovation1 Biotech holds a debt-to-equity ratio of 0.013. . Innovation1 Biotech's financial risk is the risk to Innovation1 Biotech stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Innovation1 Biotech'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. Innovation1 Biotech's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the OTC Stock is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Innovation1 OTC Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Innovation1 Biotech's stakeholders.
For most companies, including Innovation1 Biotech, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Innovation1 Biotech, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Innovation1 Biotech's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Innovation1 Biotech's debt-to-equity ratio measures a OTC Stock's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Innovation1 Biotech 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 Innovation1 Biotech to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Innovation1 Biotech is said to be less leveraged. If creditors hold a majority of Innovation1 Biotech's assets, the OTC Stock is said to be highly leveraged.
Innovation1 |
Innovation1 Biotech Debt to Cash Allocation
Innovation1 Biotech currently holds 554.4 K in liabilities with Debt to Equity (D/E) ratio of 0.01, which may suggest the company is not taking enough advantage from borrowing. Innovation1 Biotech has a current ratio of 0.03, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Innovation1 Biotech until it has trouble settling it off, either with new capital or with free cash flow. So, Innovation1 Biotech's 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 Innovation1 Biotech sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Innovation1 to invest in growth at high rates of return. When we think about Innovation1 Biotech's use of debt, we should always consider it together with cash and equity.Innovation1 Biotech 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 Innovation1 Biotech's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Innovation1 Biotech, which in turn will lower the firm's financial flexibility.Understaning Innovation1 Biotech Use of Financial Leverage
Innovation1 Biotech's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Innovation1 Biotech's current equity. If creditors own a majority of Innovation1 Biotech's assets, the company is considered highly leveraged. Understanding the composition and structure of Innovation1 Biotech's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Innovation1 Biotech Inc. operates as a small molecule drug discovery company. The company was founded in 2014 and is based in New York, New York. Innovation1 Biotech operates under Biotechnology classification in the United States and is traded on OTC Exchange. It employs 1 people. Please read more on our technical analysis page.
Thematic Opportunities
Explore Investment Opportunities
Additional Tools for Innovation1 OTC Stock Analysis
When running Innovation1 Biotech's price analysis, check to measure Innovation1 Biotech'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 Innovation1 Biotech is operating at the current time. Most of Innovation1 Biotech's value examination focuses on studying past and present price action to predict the probability of Innovation1 Biotech's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Innovation1 Biotech's price. Additionally, you may evaluate how the addition of Innovation1 Biotech 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.