World Kinect 552953CD1 Bond

WKC Stock   28.43  0.15  0.53%   
At present, World Kinect's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 82.7 M, whereas Long Term Debt is forecasted to decline to about 693.2 M. With a high degree of financial leverage come high-interest payments, which usually reduce World Kinect's Earnings Per Share (EPS).
 
Debt Ratio  
First Reported
2010-12-31
Previous Quarter
0.11870704
Current Value
0.11
Quarterly Volatility
0.11709037
 
Credit Downgrade
 
Yuan Drop
 
Covid
At present, World Kinect's Liabilities And Stockholders Equity is projected to increase significantly based on the last few years of reporting. The current year's Non Current Liabilities Total is expected to grow to about 1.4 B, whereas Non Current Liabilities Other is forecasted to decline to about 366 M.
  
Check out the analysis of World Kinect Fundamentals Over Time.
For information on how to trade World Stock refer to our How to Trade World Stock guide.
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Given the importance of World Kinect's capital structure, the first step in the capital decision process is for the management of World Kinect 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 World Kinect to issue bonds at a reasonable cost.
Popular NameWorld Kinect MGM Resorts International
SpecializationOil & Gas Refining & Marketing
Equity ISIN CodeUS9814751064
Bond Issue ISIN CodeUS552953CD18
S&P Rating
Others
Maturity Date1st of September 2026
Issuance Date19th of August 2016
Coupon4.625 %
View All World Kinect Outstanding Bonds

World Kinect Outstanding Bond Obligations

Understaning World Kinect Use of Financial Leverage

World Kinect's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures World Kinect's total debt position, including all outstanding debt obligations, and compares it with World Kinect's equity. Financial leverage can amplify the potential profits to World Kinect's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if World Kinect is unable to cover its debt costs.
Last ReportedProjected for Next Year
Short and Long Term Debt Total887.9 M932.3 M
Net Debt583.6 M612.8 M
Short Term Debt78.8 M82.7 M
Long Term Debt809.1 M693.2 M
Short and Long Term Debt78.8 M44.5 M
Long Term Debt Total954.4 M663.6 M
Net Debt To EBITDA 1.90  2.00 
Debt To Equity 0.45  0.29 
Interest Debt Per Share 16.47  17.29 
Debt To Assets 0.12  0.11 
Long Term Debt To Capitalization 0.29  0.31 
Total Debt To Capitalization 0.31  0.33 
Debt Equity Ratio 0.45  0.29 
Debt Ratio 0.12  0.11 
Cash Flow To Debt Ratio 0.31  0.29 
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When determining whether World Kinect offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of World Kinect's 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 World Kinect Stock. Outlined below are crucial reports that will aid in making a well-informed decision on World Kinect Stock:
Check out the analysis of World Kinect Fundamentals Over Time.
For information on how to trade World Stock refer to our How to Trade World Stock guide.
You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Is Oil & Gas Exploration & Production space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of World Kinect. If investors know World will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about World Kinect listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.02)
Dividend Share
0.65
Earnings Share
2.27
Revenue Per Share
743.272
Quarterly Revenue Growth
(0.14)
The market value of World Kinect is measured differently than its book value, which is the value of World that is recorded on the company's balance sheet. Investors also form their own opinion of World Kinect's value that differs from its market value or its book value, called intrinsic value, which is World Kinect's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because World Kinect's market value can be influenced by many factors that don't directly affect World Kinect's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between World Kinect's value and its price as these two are different measures arrived at by different means. Investors typically determine if World Kinect is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, World Kinect's 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.