Regis Common Corporate Bonds and Leverage Analysis

RGS Stock  USD 22.83  1.35  5.58%   
At this time, Regis Common's Short Term Debt is comparatively stable compared to the past year. Short and Long Term Debt is likely to gain to about 119 M in 2024, whereas Net Debt is likely to drop slightly above 264.6 M in 2024. . Regis Common's financial risk is the risk to Regis Common stockholders that is caused by an increase in debt.
 
Debt Ratio  
First Reported
2010-12-31
Previous Quarter
0.18764515
Current Value
0.31
Quarterly Volatility
0.18417987
 
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Non Current Liabilities Total is likely to gain to about 400.6 M in 2024, whereas Total Current Liabilities is likely to drop slightly above 98.3 M in 2024.
  
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Given the importance of Regis Common's capital structure, the first step in the capital decision process is for the management of Regis Common 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 Regis Common to issue bonds at a reasonable cost.

Regis Common Debt to Cash Allocation

Many companies such as Regis Common, 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.
Regis Common has 399.28 M in debt. Regis Common has a current ratio of 0.31, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Note however, debt could still be an excellent tool for Regis to invest in growth at high rates of return.

Regis Common Total Assets Over Time

Regis Common Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Regis Common 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.

Regis Common Debt Ratio

    
  31.0   
It appears slightly above 69% of Regis Common's assets are financed through equity. 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 Regis Common's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Regis Common, which in turn will lower the firm's financial flexibility.

Regis Common Corporate Bonds Issued

Regis Short Long Term Debt Total

Short Long Term Debt Total

353.79 Million

At this time, Regis Common's Short and Long Term Debt Total is comparatively stable compared to the past year.

Understaning Regis Common Use of Financial Leverage

Regis Common's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Regis Common's current equity. If creditors own a majority of Regis Common's assets, the company is considered highly leveraged. Understanding the composition and structure of Regis Common'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 Total399.3 M353.8 M
Net Debt389.2 M264.6 M
Short Term Debt69.1 M70.1 M
Long Term Debt99.5 M94.6 M
Long Term Debt Total159.1 M120.1 M
Short and Long Term Debt81 M119 M
Net Debt To EBITDA 3.26  3.43 
Debt To Equity 1.75  1.84 
Interest Debt Per Share 53.42  50.74 
Debt To Assets 0.19  0.31 
Long Term Debt To Capitalization 0.64  0.32 
Total Debt To Capitalization 0.64  0.52 
Debt Equity Ratio 1.75  1.84 
Debt Ratio 0.19  0.31 
Cash Flow To Debt Ratio(0.02)(0.02)
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Additional Tools for Regis Stock Analysis

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