Federal Agricultural Debt
| AGM-A Stock | USD 161.79 3.75 2.27% |
At present, Federal Agricultural's Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt is expected to grow to about 28.1 B, whereas Short Term Debt is forecasted to decline to about 5.2 B. With a high degree of financial leverage come high-interest payments, which usually reduce Federal Agricultural's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.937788 | Current Value 0.78 | Quarterly Volatility 0.13192637 |
Given that Federal Agricultural'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 Federal Agricultural 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 Federal Agricultural to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Federal Agricultural is said to be less leveraged. If creditors hold a majority of Federal Agricultural's assets, the Company is said to be highly leveraged.
At present, Federal Agricultural's Liabilities And Stockholders Equity is projected to increase significantly based on the last few years of reporting. The current year's Non Current Liabilities Total is expected to grow to about 29.5 B, whereas Total Current Liabilities is forecasted to decline to about 5.4 B. Federal |
Federal Agricultural Debt to Cash Allocation
As Federal Agricultural Mortgage follows its natural business cycle, the capital allocation decisions will not magically go away. Federal Agricultural'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.
Federal Agricultural Mortgage has accumulated 27.69 B in total debt. Federal Agricultural 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. Note, when we think about Federal Agricultural's use of debt, we should always consider it together with its cash and equity.Federal Agricultural Total Assets Over Time
Federal Agricultural Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Federal Agricultural 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.Federal Agricultural Debt Ratio | 78.0 |
Federal Agricultural Corporate Bonds Issued
Most Federal bonds can be classified according to their maturity, which is the date when Federal Agricultural Mortgage has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Federal Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Federal Agricultural Use of Financial Leverage
Federal Agricultural's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Federal Agricultural's total debt position, including all outstanding debt obligations, and compares it with Federal Agricultural's equity. Financial leverage can amplify the potential profits to Federal Agricultural's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Federal Agricultural is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 27.7 B | 29.1 B | |
| Net Debt | 26.8 B | 28.1 B | |
| Short Term Debt | 8.1 B | 5.2 B | |
| Long Term Debt | 19.9 B | 20.8 B | |
| Long Term Debt Total | 201.6 M | 191.5 M | |
| Short and Long Term Debt | 8.1 B | 7.6 B | |
| Net Debt To EBITDA | 34.58 | 21.01 | |
| Debt To Equity | 19.61 | 38.79 | |
| Interest Debt Per Share | 2.7 K | 2.8 K | |
| Debt To Assets | 0.94 | 0.78 | |
| Long Term Debt To Capitalization | 0.93 | 0.73 | |
| Total Debt To Capitalization | 0.95 | 0.77 | |
| Debt Equity Ratio | 19.61 | 38.79 | |
| Debt Ratio | 0.94 | 0.78 | |
| Cash Flow To Debt Ratio | 0.01 | 0.01 |
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether Federal Agricultural is a strong investment it is important to analyze Federal Agricultural's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Federal Agricultural's future performance. For an informed investment choice regarding Federal Stock, refer to the following important reports:Check out Trending Equities to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in board of governors. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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.