Red Mountain Debt
RMX Stock | 0.01 0 10.00% |
Short Term Debt is likely to gain to about 162.1 K in 2024, whereas Short and Long Term Debt is likely to drop slightly above 27.9 K in 2024. . Red Mountain's financial risk is the risk to Red Mountain stockholders that is caused by an increase in debt.
Given that Red Mountain'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 Red Mountain 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 Red Mountain to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Red Mountain is said to be less leveraged. If creditors hold a majority of Red Mountain's assets, the Company is said to be highly leveraged.
Liabilities And Stockholders Equity is likely to gain to about 4.4 M in 2024, whereas Total Current Liabilities is likely to drop slightly above 193.9 K in 2024. Red |
Red Mountain Mining Debt to Cash Allocation
Red Mountain Mining has accumulated 107.15 K in total debt. Debt can assist Red Mountain until it has trouble settling it off, either with new capital or with free cash flow. So, Red Mountain'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 Red Mountain Mining sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Red to invest in growth at high rates of return. When we think about Red Mountain's use of debt, we should always consider it together with cash and equity.Red Mountain Total Assets Over Time
Red Mountain 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 Red Mountain's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Red Mountain, which in turn will lower the firm's financial flexibility.Red Mountain Corporate Bonds Issued
Red Short Long Term Debt
Short Long Term Debt |
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Understaning Red Mountain Use of Financial Leverage
Red Mountain's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Red Mountain's current equity. If creditors own a majority of Red Mountain's assets, the company is considered highly leveraged. Understanding the composition and structure of Red Mountain's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last Reported | Projected for Next Year | ||
Short and Long Term Debt | 29.3 K | 27.9 K | |
Short Term Debt | 83.5 K | 162.1 K | |
Net Debt | -321.3 K | -337.3 K | |
Short and Long Term Debt Total | 107.2 K | 101.8 K | |
Long Term Debt Total | 131.6 K | 113.1 K |
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Additional Tools for Red Stock Analysis
When running Red Mountain's price analysis, check to measure Red Mountain'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 Red Mountain is operating at the current time. Most of Red Mountain's value examination focuses on studying past and present price action to predict the probability of Red Mountain's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Red Mountain's price. Additionally, you may evaluate how the addition of Red Mountain 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.