Theratechnologies F1R15XK36 Bond

TH Stock  CAD 2.00  0.15  8.11%   
Theratechnologies has over 58.97 Million in debt which may indicate that it relies heavily on debt financing. At this time, Theratechnologies' Net Debt is very stable compared to the past year. As of the 4th of December 2024, Interest Debt Per Share is likely to grow to 2.46, while Short and Long Term Debt Total is likely to drop about 38.1 M. With a high degree of financial leverage come high-interest payments, which usually reduce Theratechnologies' Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Theratechnologies' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Theratechnologies' 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 Theratechnologies Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Theratechnologies' stakeholders.
For most companies, including Theratechnologies, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Theratechnologies, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Theratechnologies' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
19.4616
Book Value
(0.43)
Operating Margin
0.2749
Profit Margin
(0.04)
Return On Assets
0.1176
At this time, Theratechnologies' Total Current Liabilities is very stable compared to the past year. As of the 4th of December 2024, Non Current Liabilities Total is likely to grow to about 62 M, while Liabilities And Stockholders Equity is likely to drop about 65.2 M.
  
Check out the analysis of Theratechnologies Fundamentals Over Time.
To learn how to invest in Theratechnologies Stock, please use our How to Invest in Theratechnologies guide.
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Given the importance of Theratechnologies' capital structure, the first step in the capital decision process is for the management of Theratechnologies 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 Theratechnologies to issue bonds at a reasonable cost.
Popular NameTheratechnologies BNP Paribas FRN
SpecializationPharmaceuticals, Biotechnology & Life Sciences
Equity ISIN CodeCA88338H1001
Bond Issue ISIN CodeUSF1R15XK367
S&P Rating
Others
Maturity Date31st of December 99
Issuance DateOthers
View All Theratechnologies Outstanding Bonds

Theratechnologies Outstanding Bond Obligations

Understaning Theratechnologies Use of Financial Leverage

Leverage ratios show Theratechnologies' total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Theratechnologies' financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
Last ReportedProjected for Next Year
Short and Long Term Debt Total67.8 M38.1 M
Net Debt28.6 M30 M
Short Term Debt8.9 M8.8 M
Short and Long Term Debt8.4 MM
Long Term Debt58.3 M34.4 M
Long Term Debt Total1.7 M1.6 M
Net Debt To EBITDA(2.90)(3.05)
Debt To Equity(2.50)(2.38)
Interest Debt Per Share 2.34  2.46 
Debt To Assets 0.67  0.70 
Long Term Debt To Capitalization 1.53  1.61 
Total Debt To Capitalization 1.41  1.48 
Debt Equity Ratio(2.50)(2.38)
Debt Ratio 0.67  0.70 
Cash Flow To Debt Ratio(0.09)(0.09)
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Pair Trading with Theratechnologies

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Theratechnologies position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Theratechnologies will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to Theratechnologies could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Theratechnologies when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Theratechnologies - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Theratechnologies to buy it.
The correlation of Theratechnologies is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Theratechnologies moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Theratechnologies moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Theratechnologies can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether Theratechnologies offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Theratechnologies' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Theratechnologies Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Theratechnologies Stock:
Check out the analysis of Theratechnologies Fundamentals Over Time.
To learn how to invest in Theratechnologies Stock, please use our How to Invest in Theratechnologies guide.
You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Please note, there is a significant difference between Theratechnologies' value and its price as these two are different measures arrived at by different means. Investors typically determine if Theratechnologies is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Theratechnologies' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

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.