Labyrinth Resources Debt
| LRL Stock | 0.25 0.01 3.85% |
Net Debt is likely to drop to about (301.4 K) in 2024. Short and Long Term Debt Total is likely to drop to about 166.9 K in 2024. Labyrinth Resources' financial risk is the risk to Labyrinth Resources stockholders that is caused by an increase in debt.
Given that Labyrinth Resources' 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 Labyrinth Resources 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 Labyrinth Resources to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Labyrinth Resources is said to be less leveraged. If creditors hold a majority of Labyrinth Resources' assets, the Company is said to be highly leveraged.
At this time, Labyrinth Resources' Total Current Liabilities is comparatively stable compared to the past year. Liabilities And Stockholders Equity is likely to gain to about 40.8 M in 2024, whereas Non Current Liabilities Total is likely to drop 0.00 in 2024. Labyrinth |
Labyrinth Resources Total Assets Over Time
Labyrinth Resources 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 Labyrinth Resources' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Labyrinth Resources, which in turn will lower the firm's financial flexibility.Labyrinth Resources Corporate Bonds Issued
Labyrinth Net Debt
Net Debt |
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Understaning Labyrinth Resources Use of Financial Leverage
Labyrinth Resources' financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Labyrinth Resources' current equity. If creditors own a majority of Labyrinth Resources' assets, the company is considered highly leveraged. Understanding the composition and structure of Labyrinth Resources' outstanding bonds gives an idea of how risky it is and if it is worth investing in.
| Last Reported | Projected for Next Year | ||
| Net Debt | -287.1 K | -301.4 K | |
| Short and Long Term Debt Total | 175.7 K | 166.9 K | |
| Short and Long Term Debt | 76.7 K | 68.1 K |
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Additional Tools for Labyrinth Stock Analysis
When running Labyrinth Resources' price analysis, check to measure Labyrinth Resources' 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 Labyrinth Resources is operating at the current time. Most of Labyrinth Resources' value examination focuses on studying past and present price action to predict the probability of Labyrinth Resources' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Labyrinth Resources' price. Additionally, you may evaluate how the addition of Labyrinth Resources 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.