Zhongsheng Group Holdings AerCap Bond
| 5Z0 Stock | EUR 1.94 0.11 6.01% |
Zhongsheng Group Holdings has over 8.87 Billion in debt which may indicate that it relies heavily on debt financing. . Zhongsheng Group's financial risk is the risk to Zhongsheng Group stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Zhongsheng Group'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. Zhongsheng Group'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 Zhongsheng Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Zhongsheng Group's stakeholders.
For most companies, including Zhongsheng Group, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Zhongsheng Group Holdings, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Zhongsheng Group's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Zhongsheng |
Given the importance of Zhongsheng Group's capital structure, the first step in the capital decision process is for the management of Zhongsheng Group 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 Zhongsheng Group Holdings to issue bonds at a reasonable cost.
| Popular Name | Zhongsheng Group AerCap Global Aviation |
| Equity ISIN Code | KYG9894K1085 |
| Bond Issue ISIN Code | US00773HAA59 |
Zhongsheng Group Holdings Outstanding Bond Obligations
| Dana 575 percent | US235822AB96 | Details | |
| Boeing Co 2196 | US097023DG73 | Details | |
| BNP Paribas FRN | USF1R15XK367 | Details | |
| AerCap Global Aviation | US00773HAA59 | Details |
Understaning Zhongsheng Group Use of Financial Leverage
Zhongsheng Group's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Zhongsheng Group's total debt position, including all outstanding debt obligations, and compares it with Zhongsheng Group's equity. Financial leverage can amplify the potential profits to Zhongsheng Group's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Zhongsheng Group is unable to cover its debt costs.
Zhongsheng Group Holdings Limited, an investment holding company, engages in the sale and service of motor vehicles. Zhongsheng Group Holdings Limited was founded in 1998 and is headquartered in Dalian, the Peoples Republic of China. Zhongsheng Group is traded on Frankfurt Stock Exchange in Germany. Please read more on our technical analysis page.
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Other Information on Investing in Zhongsheng Stock
Zhongsheng Group financial ratios help investors to determine whether Zhongsheng Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Zhongsheng with respect to the benefits of owning Zhongsheng Group security.
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.