Accord Financial Corp Corporate Bonds and Leverage Analysis
| ACD Stock | CAD 3.96 0.04 1.00% |
Accord Financial Corp holds a debt-to-equity ratio of 2.54. At this time, Accord Financial's Net Debt To EBITDA is very stable compared to the past year. As of the 27th of November 2024, Debt To Equity is likely to grow to 5.16, while Long Term Debt To Capitalization is likely to drop 0.17. With a high degree of financial leverage come high-interest payments, which usually reduce Accord Financial's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Accord Financial'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. Accord Financial'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 Accord Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Accord Financial's stakeholders.
For most companies, including Accord Financial, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Accord Financial Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Accord Financial's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 0.4128 | Book Value 9.668 | Operating Margin (0.05) | Profit Margin (0.21) | Return On Assets (0.02) |
Accord |
Given the importance of Accord Financial's capital structure, the first step in the capital decision process is for the management of Accord Financial 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 Accord Financial Corp to issue bonds at a reasonable cost.
Accord Financial Corp Debt to Cash Allocation
Accord Financial Corp has accumulated 414.05 M in total debt with debt to equity ratio (D/E) of 2.54, implying the company greatly relies on financing operations through barrowing. Accord Financial Corp has a current ratio of 1.49, which is within standard range for the sector. Debt can assist Accord Financial until it has trouble settling it off, either with new capital or with free cash flow. So, Accord Financial's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Accord Financial Corp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Accord to invest in growth at high rates of return. When we think about Accord Financial's use of debt, we should always consider it together with cash and equity.Accord Financial Total Assets Over Time
Accord Financial Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Accord Financial uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Accord Financial Debt Ratio | 84.0 |
Accord Financial Corporate Bonds Issued
Accord Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Accord Financial Use of Financial Leverage
Leverage ratios show Accord Financial'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 Accord Financial'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).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 414 M | 434.7 M | |
| Net Debt | 408.1 M | 428.5 M | |
| Short Term Debt | 390.1 M | 409.6 M | |
| Short and Long Term Debt | 371.8 M | 390.4 M | |
| Long Term Debt | 40.4 M | 59.2 M | |
| Long Term Debt Total | 177.1 M | 186 M | |
| Net Debt To EBITDA | 19.73 | 20.72 | |
| Debt To Equity | 4.92 | 5.16 | |
| Interest Debt Per Share | 52.34 | 54.95 | |
| Debt To Assets | 0.80 | 0.84 | |
| Long Term Debt To Capitalization | 0.21 | 0.17 | |
| Total Debt To Capitalization | 0.83 | 0.87 | |
| Debt Equity Ratio | 4.92 | 5.16 | |
| Debt Ratio | 0.80 | 0.84 | |
| Cash Flow To Debt Ratio | (0.12) | (0.12) |
Pair Trading with Accord Financial
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 Accord Financial 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 Accord Financial will appreciate offsetting losses from the drop in the long position's value.Moving against Accord Stock
| 0.42 | RY-PS | Royal Bank Earnings Call This Week | PairCorr |
| 0.37 | RY-PM | Royal Bank Earnings Call This Week | PairCorr |
The ability to find closely correlated positions to Accord Financial could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Accord Financial 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 Accord Financial - 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 Accord Financial Corp to buy it.
The correlation of Accord Financial 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 Accord Financial moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Accord Financial Corp 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 Accord Financial 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.Other Information on Investing in Accord Stock
Accord Financial financial ratios help investors to determine whether Accord 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 Accord with respect to the benefits of owning Accord Financial 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.