Steamships Trading Debt

SST Stock   13.80  0.00  0.00%   
Short and Long Term Debt Total is likely to drop to about 253.4 M in 2024. Net Debt is likely to drop to about 228.6 M in 2024. Steamships Trading's financial risk is the risk to Steamships Trading stockholders that is caused by an increase in debt.
At this time, Steamships Trading's Total Current Liabilities is comparatively stable compared to the past year. Non Current Liabilities Total is likely to gain to about 503.8 M in 2024, whereas Liabilities And Stockholders Equity is likely to drop slightly above 878.3 M in 2024.
  
Check out the analysis of Steamships Trading Fundamentals Over Time.

Steamships Trading Debt to Cash Allocation

Steamships Trading has accumulated 477.87 M in total debt. Debt can assist Steamships Trading until it has trouble settling it off, either with new capital or with free cash flow. So, Steamships Trading'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 Steamships Trading sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Steamships to invest in growth at high rates of return. When we think about Steamships Trading's use of debt, we should always consider it together with cash and equity.

Steamships Trading Total Assets Over Time

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

Steamships Trading Corporate Bonds Issued

Steamships Short Long Term Debt Total

Short Long Term Debt Total

253.35 Million

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

Understaning Steamships Trading Use of Financial Leverage

Steamships Trading's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Steamships Trading's current equity. If creditors own a majority of Steamships Trading's assets, the company is considered highly leveraged. Understanding the composition and structure of Steamships Trading'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 Total477.9 M253.4 M
Net Debt449.1 M228.6 M
Short Term Debt37.3 M35.5 M
Long Term Debt385.3 M243.9 M
Short and Long Term Debt34.8 M33 M
Long Term Debt Total69.5 M66 M
Please read more on our technical analysis page.

Thematic Opportunities

Explore Investment Opportunities

Build portfolios using Macroaxis predefined set of investing ideas. Many of Macroaxis investing ideas can easily outperform a given market. Ideas can also be optimized per your risk profile before portfolio origination is invoked. Macroaxis thematic optimization helps investors identify companies most likely to benefit from changes or shifts in various micro-economic or local macro-level trends. Originating optimal thematic portfolios involves aligning investors' personal views, ideas, and beliefs with their actual investments.
Explore Investing Ideas  

Additional Tools for Steamships Stock Analysis

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