Skyline Debt

SKY Stock  USD 94.45  2.40  2.61%   
Skyline holds a debt-to-equity ratio of 0.053. At this time, Skyline's Short and Long Term Debt Total is fairly stable compared to the past year. Long Term Debt is likely to rise to about 29.9 M in 2025, despite the fact that Net Debt is likely to grow to (291 M). With a high degree of financial leverage come high-interest payments, which usually reduce Skyline's Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Skyline'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. Skyline'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 Skyline Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Skyline's stakeholders.
For most companies, including Skyline, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Skyline, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Skyline's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
3.5251
Book Value
26.719
Operating Margin
0.1129
Profit Margin
0.068
Return On Assets
0.0648
At this time, Skyline's Total Current Liabilities is fairly stable compared to the past year. Liabilities And Stockholders Equity is likely to rise to about 2.3 B in 2025, despite the fact that Change To Liabilities is likely to grow to (76.1 M).
  
Check out the analysis of Skyline Fundamentals Over Time.
For more information on how to buy Skyline Stock please use our How to Invest in Skyline guide.

Skyline Bond Ratings

Skyline financial ratings play a critical role in determining how much Skyline have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Skyline's borrowing costs.
Piotroski F Score
4
PoorView
Beneish M Score
(2.81)
Unlikely ManipulatorView

Skyline Debt to Cash Allocation

As Skyline follows its natural business cycle, the capital allocation decisions will not magically go away. Skyline's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Skyline has 154.7 M in debt with debt to equity (D/E) ratio of 0.05, which may show that the company is not taking advantage of profits from borrowing. Skyline has a current ratio of 2.4, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Skyline to invest in growth at high rates of return.

Skyline Total Assets Over Time

Skyline Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Skyline 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.

Skyline Debt Ratio

    
  10.0   
It appears most of the Skyline'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 Skyline's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Skyline, which in turn will lower the firm's financial flexibility.

Skyline Corporate Bonds Issued

Skyline Net Debt

Net Debt

(291.01 Million)

Skyline reported Net Debt of (306.33 Million) in 2024

Understaning Skyline Use of Financial Leverage

Understanding the structure of Skyline's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Skyline's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
Last ReportedProjected for Next Year
Net Debt-306.3 M-291 M
Short and Long Term Debt Total177.9 M186.8 M
Long Term Debt28.4 M29.9 M
Long Term Debt Total14.3 M13.6 M
Short and Long Term Debt105 M110.2 M
Short Term Debt113.6 M119.3 M
Net Debt To EBITDA(5.14)(4.89)
Debt To Equity 0.17  0.20 
Interest Debt Per Share 0.20  0.19 
Debt To Assets 0.08  0.10 
Long Term Debt To Capitalization 0.15  0.12 
Total Debt To Capitalization 0.15  0.17 
Debt Equity Ratio 0.17  0.20 
Debt Ratio 0.08  0.10 
Cash Flow To Debt Ratio 7.76  8.15 
Please read more on our technical analysis page.

Also Currently Popular

Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.

Additional Tools for Skyline Stock Analysis

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