Subsea 7 Debt
| SUBCYDelisted Stock | USD 12.20 0.17 1.37% |
Subsea 7 SA holds a debt-to-equity ratio of 0.125. With a high degree of financial leverage come high-interest payments, which usually reduce Subsea 7's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Subsea 7'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. Subsea 7'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 Subsea Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect Subsea 7's stakeholders.
For most companies, including Subsea 7, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Subsea 7 SA, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Subsea 7'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 Subsea 7'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 Subsea 7 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 Subsea 7 to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Subsea 7 is said to be less leveraged. If creditors hold a majority of Subsea 7's assets, the Company is said to be highly leveraged.
Subsea |
Subsea 7 SA Debt to Cash Allocation
Subsea 7 SA has accumulated 360.3 M in total debt with debt to equity ratio (D/E) of 0.13, which may suggest the company is not taking enough advantage from borrowing. Subsea 7 SA has a current ratio of 1.2, suggesting that it may have difficulties to pay its financial obligations in time and when they become due. Debt can assist Subsea 7 until it has trouble settling it off, either with new capital or with free cash flow. So, Subsea 7'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 Subsea 7 SA sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Subsea to invest in growth at high rates of return. When we think about Subsea 7's use of debt, we should always consider it together with cash and equity.Subsea 7 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 Subsea 7's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Subsea 7, which in turn will lower the firm's financial flexibility.Subsea 7 Corporate Bonds Issued
Understaning Subsea 7 Use of Financial Leverage
Understanding the structure of Subsea 7's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Subsea 7'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.
Subsea 7 S.A. delivers offshore projects and services for the evolving energy industry worldwide. Subsea 7 S.A. was incorporated in 1993 and is based in Luxembourg. Subsea 7 is traded on OTC Exchange in the United States. 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.Check out World Market Map to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in main economic indicators. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Consideration for investing in Subsea Pink Sheet
If you are still planning to invest in Subsea 7 SA check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Subsea 7's history and understand the potential risks before investing.
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |
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.