Zions Bancorporation Debt
| ZION Stock | USD 48.63 1.63 3.47% |
Zions Bancorporation holds a debt-to-equity ratio of 0.11. With a high degree of financial leverage come high-interest payments, which usually reduce Zions Bancorporation's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Zions Bancorporation'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. Zions Bancorporation'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 Zions Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Zions Bancorporation's stakeholders.
For most companies, including Zions Bancorporation, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Zions Bancorporation, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Zions Bancorporation'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 Zions Bancorporation'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 Zions Bancorporation 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 Zions Bancorporation to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Zions Bancorporation is said to be less leveraged. If creditors hold a majority of Zions Bancorporation's assets, the Company is said to be highly leveraged.
Zions |
Zions Bancorporation Bond Ratings
Zions Bancorporation financial ratings play a critical role in determining how much Zions Bancorporation 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 Zions Bancorporation's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (2.64) | Unlikely Manipulator | View |
Zions Bancorporation Debt to Cash Allocation
As Zions Bancorporation follows its natural business cycle, the capital allocation decisions will not magically go away. Zions Bancorporation'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.
Zions Bancorporation currently holds 4.78 B in liabilities with Debt to Equity (D/E) ratio of 0.11, which may suggest the company is not taking enough advantage from borrowing. Note, when we think about Zions Bancorporation's use of debt, we should always consider it together with its cash and equity.Zions Bancorporation 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 Zions Bancorporation's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Zions Bancorporation, which in turn will lower the firm's financial flexibility.Zions Bancorporation Corporate Bonds Issued
Understaning Zions Bancorporation Use of Financial Leverage
Leverage ratios show Zions Bancorporation's 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 Zions Bancorporation's 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).
Zions Bancorporation, National Association provides various banking and related services primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. Zions Bancorporation, National Association was founded in 1873 and is headquartered in Salt Lake City, Utah. Zions Bancorp operates under BanksRegional classification in the United States and is traded on NASDAQ Exchange. It employs 9920 people. Please read more on our technical analysis page.
When determining whether Zions Bancorporation offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Zions Bancorporation'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 Zions Bancorporation Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Zions Bancorporation Stock: Check out the analysis of Zions Bancorporation Fundamentals Over Time. To learn how to invest in Zions Stock, please use our How to Invest in Zions Bancorporation guide.You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Is Regional Banks 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 Zions Bancorporation. If investors know Zions 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 Zions Bancorporation listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Zions Bancorporation is measured differently than its book value, which is the value of Zions that is recorded on the company's balance sheet. Investors also form their own opinion of Zions Bancorporation's value that differs from its market value or its book value, called intrinsic value, which is Zions Bancorporation'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 Zions Bancorporation's market value can be influenced by many factors that don't directly affect Zions Bancorporation'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 Zions Bancorporation's value and its price as these two are different measures arrived at by different means. Investors typically determine if Zions Bancorporation is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Zions Bancorporation'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.