NSI NV Debt
| NSI Stock | EUR 22.40 0.05 0.22% |
NSI NV has over 389.1 Million in debt which may indicate that it relies heavily on debt financing. . NSI NV's financial risk is the risk to NSI NV stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
NSI NV'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. NSI NV's 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 NSI Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect NSI NV's stakeholders.
For most companies, including NSI NV, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for NSI NV, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, NSI NV'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 NSI NV'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 NSI NV 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 NSI NV to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, NSI NV is said to be less leveraged. If creditors hold a majority of NSI NV's assets, the Company is said to be highly leveraged.
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NSI NV Debt to Cash Allocation
Many companies such as NSI NV, 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.
NSI NV has accumulated 389.1 M in total debt with debt to equity ratio (D/E) of 61.8, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. NSI NV has a current ratio of 0.16, 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 NSI NV until it has trouble settling it off, either with new capital or with free cash flow. So, NSI NV'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 NSI NV sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for NSI to invest in growth at high rates of return. When we think about NSI NV's use of debt, we should always consider it together with cash and equity.NSI NV 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 NSI NV's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of NSI NV, which in turn will lower the firm's financial flexibility.NSI NV Corporate Bonds Issued
Understaning NSI NV Use of Financial Leverage
NSI NV's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to NSI NV's current equity. If creditors own a majority of NSI NV's assets, the company is considered highly leveraged. Understanding the composition and structure of NSI NV's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
NSI N.V. is a specialist commercial property investor and the only listed real estate investment trust focused on well-located offices in economic growth regions in The Netherlands. By investing in attractive space and a high level of services for its customers, NSI can generate sustainable and growing revenues to support an attractive level of dividend. NSI N operates under Office Commercial And Industrial Real Estate classification in Netherlands and is traded on Amsterdam Stock Exchange. It employs 44 people. Please read more on our technical analysis page.
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Additional Tools for NSI Stock Analysis
When running NSI NV's price analysis, check to measure NSI NV'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 NSI NV is operating at the current time. Most of NSI NV's value examination focuses on studying past and present price action to predict the probability of NSI NV's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move NSI NV's price. Additionally, you may evaluate how the addition of NSI NV 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.