ATCO Current Debt
| ACO-Y Stock | CAD 52.29 3.29 6.71% |
ATCO has over 11.17 Billion in debt which may indicate that it relies heavily on debt financing. At this time, ATCO's Debt Ratio is comparatively stable compared to the past year. Cash Flow To Debt Ratio is likely to gain to 0.23 in 2024, whereas Short and Long Term Debt is likely to drop slightly above 345.6 M in 2024. . ATCO's financial risk is the risk to ATCO stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
ATCO'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. ATCO'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 ATCO Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect ATCO's stakeholders.
ATCO Quarterly Net Debt |
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For most companies, including ATCO, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for ATCO, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, ATCO'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 1.3045 | Book Value 39.435 | Operating Margin 0.1925 | Profit Margin 0.0817 | Return On Assets 0.0296 |
Given that ATCO'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 ATCO 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 ATCO to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, ATCO is said to be less leveraged. If creditors hold a majority of ATCO's assets, the Company is said to be highly leveraged.
Change To Liabilities is likely to gain to about 339.3 M in 2024, whereas Total Current Liabilities is likely to drop slightly above 1 B in 2024. ATCO |
ATCO Debt to Cash Allocation
ATCO has accumulated 11.17 B in total debt with debt to equity ratio (D/E) of 129.7, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. ATCO has a current ratio of 1.15, suggesting that it is in a questionable position to pay out its financial obligations in time and when they become due. Debt can assist ATCO until it has trouble settling it off, either with new capital or with free cash flow. So, ATCO'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 ATCO sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for ATCO to invest in growth at high rates of return. When we think about ATCO's use of debt, we should always consider it together with cash and equity.ATCO Common Stock Shares Outstanding Over Time
ATCO Assets Financed by Debt
The debt-to-assets ratio shows the degree to which ATCO 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.ATCO Debt Ratio | 47.0 |
ATCO Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning ATCO Use of Financial Leverage
ATCO's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to ATCO's current equity. If creditors own a majority of ATCO's assets, the company is considered highly leveraged. Understanding the composition and structure of ATCO's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 11.2 B | 6.6 B | |
| Net Debt | 10.9 B | 5.9 B | |
| Short Term Debt | 548 M | 575.4 M | |
| Long Term Debt | 10.5 B | 10.7 B | |
| Short and Long Term Debt | 531 M | 345.6 M | |
| Net Debt To EBITDA | 4.79 | 2.75 | |
| Debt To Equity | 2.50 | 2.61 | |
| Interest Debt Per Share | 101.94 | 107.03 | |
| Debt To Assets | 0.44 | 0.47 | |
| Long Term Debt To Capitalization | 0.70 | 0.76 | |
| Total Debt To Capitalization | 0.71 | 0.77 | |
| Debt Equity Ratio | 2.50 | 2.61 | |
| Debt Ratio | 0.44 | 0.47 | |
| Cash Flow To Debt Ratio | 0.18 | 0.23 |
Pair Trading with ATCO
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 ATCO 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 ATCO will appreciate offsetting losses from the drop in the long position's value.Moving together with ATCO Stock
Moving against ATCO Stock
The ability to find closely correlated positions to ATCO could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace ATCO 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 ATCO - 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 ATCO to buy it.
The correlation of ATCO 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 ATCO moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if ATCO 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 ATCO 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.Additional Tools for ATCO Stock Analysis
When running ATCO's price analysis, check to measure ATCO's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy ATCO is operating at the current time. Most of ATCO's value examination focuses on studying past and present price action to predict the probability of ATCO's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move ATCO's price. Additionally, you may evaluate how the addition of ATCO to your portfolios can decrease your overall portfolio volatility.
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.