C3 Ai Debt
| AI Stock | USD 32.36 0.60 1.82% |
C3 Ai Inc holds a debt-to-equity ratio of 0.029. The current Net Debt is estimated to decrease to about (172.1 M). The current Short Term Debt is estimated to decrease to about 3.1 M With a high degree of financial leverage come high-interest payments, which usually reduce C3 Ai's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
C3 Ai'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. C3 Ai'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 C3 Ai Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect C3 Ai's stakeholders.
For most companies, including C3 Ai, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for C3 Ai Inc, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, C3 Ai'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 4.6985 | Book Value 6.933 | Operating Margin (0.83) | Profit Margin (0.85) | Return On Assets (0.18) |
C3 Ai |
C3 Ai Inc Debt to Cash Allocation
As C3 Ai Inc follows its natural business cycle, the capital allocation decisions will not magically go away. C3 Ai'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.
C3 Ai Inc reports 3.23 M of total liabilities with total debt to equity ratio (D/E) of 0.03, which may suggest the company is not taking enough advantage from financial leverage. C3 Ai Inc has a current ratio of 7.52, indicating that it is in good position to pay out its debt commitments in time. Note however, debt could still be an excellent tool for C3 Ai to invest in growth at high rates of return. C3 Ai Total Assets Over Time
C3 Ai 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 C3 Ai's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of C3 Ai, which in turn will lower the firm's financial flexibility.C3 Ai Corporate Bonds Issued
Most C3 Ai bonds can be classified according to their maturity, which is the date when C3 Ai Inc 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.
C3 Ai Net Debt
Net Debt |
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Understaning C3 Ai Use of Financial Leverage
Understanding the composition and structure of C3 Ai's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of C3 Ai's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Net Debt | -163.9 M | -172.1 M | |
| Short Term Debt | 3.2 M | 3.1 M | |
| Short and Long Term Debt Total | 3.2 M | 3.1 M | |
| Net Debt To EBITDA | 0.54 | 0.51 | |
| Interest Debt Per Share | 0.02 | 0.01 |
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Check out the analysis of C3 Ai Fundamentals Over Time. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Is Systems Software space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of C3 Ai. If investors know C3 Ai will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about C3 Ai listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (2.28) | Revenue Per Share 2.674 | Quarterly Revenue Growth 0.205 | Return On Assets (0.18) | Return On Equity (0.31) |
The market value of C3 Ai Inc is measured differently than its book value, which is the value of C3 Ai that is recorded on the company's balance sheet. Investors also form their own opinion of C3 Ai's value that differs from its market value or its book value, called intrinsic value, which is C3 Ai's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because C3 Ai's market value can be influenced by many factors that don't directly affect C3 Ai's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between C3 Ai's value and its price as these two are different measures arrived at by different means. Investors typically determine if C3 Ai is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, C3 Ai's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
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.