Sino Platinum Current Debt
| 600459 Stock | 13.98 0.15 1.06% |
At present, Sino Platinum's Long Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Short and Long Term Debt is expected to grow to about 1.1 B, whereas Short Term Debt is forecasted to decline to about 1.7 B. With a high degree of financial leverage come high-interest payments, which usually reduce Sino Platinum's Earnings Per Share (EPS).
Given that Sino Platinum'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 Sino Platinum 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 Sino Platinum to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Sino Platinum is said to be less leveraged. If creditors hold a majority of Sino Platinum's assets, the Company is said to be highly leveraged.
Change To Liabilities is expected to grow at the current pace this year, whereas Total Current Liabilities is forecasted to decline to about 1.5 B. Sino |
Sino Platinum Total Assets Over Time
Sino Platinum 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 Sino Platinum's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Sino Platinum, which in turn will lower the firm's financial flexibility.Sino Long Term Debt
Long Term Debt |
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Understaning Sino Platinum Use of Financial Leverage
Sino Platinum's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Sino Platinum's total debt position, including all outstanding debt obligations, and compares it with Sino Platinum's equity. Financial leverage can amplify the potential profits to Sino Platinum's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Sino Platinum is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 1.8 B | 1.9 B | |
| Short and Long Term Debt | 710.2 M | 1.1 B | |
| Short Term Debt | 2.1 B | 1.7 B | |
| Net Debt | 654.3 M | 1.3 B |
Currently Active Assets on Macroaxis
Other Information on Investing in Sino Stock
Sino Platinum financial ratios help investors to determine whether Sino 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 Sino with respect to the benefits of owning Sino Platinum 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.