ANDINA BOTTLING Current Debt
ANDINA BOTTLING INC has over 174.64 Billion in debt which may indicate that it relies heavily on debt financing. With a high degree of financial leverage come high-interest payments, which usually reduce ANDINA BOTTLING's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
ANDINA BOTTLING'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. ANDINA BOTTLING'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 ANDINA Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect ANDINA BOTTLING's stakeholders.
For most companies, including ANDINA BOTTLING, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for ANDINA BOTTLING INC, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, ANDINA BOTTLING's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that ANDINA BOTTLING'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 ANDINA BOTTLING 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 ANDINA BOTTLING to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, ANDINA BOTTLING is said to be less leveraged. If creditors hold a majority of ANDINA BOTTLING's assets, the Company is said to be highly leveraged.
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ANDINA BOTTLING INC Debt to Cash Allocation
As ANDINA BOTTLING INC follows its natural business cycle, the capital allocation decisions will not magically go away. ANDINA BOTTLING'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.
ANDINA BOTTLING INC has accumulated 174.64 B in total debt with debt to equity ratio (D/E) of 1.7738025E7, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. ANDINA BOTTLING INC has a current ratio of 1.29, 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 ANDINA BOTTLING's use of debt, we should always consider it together with its cash and equity.ANDINA BOTTLING 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 ANDINA BOTTLING's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of ANDINA BOTTLING, which in turn will lower the firm's financial flexibility.Also Currently Popular
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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Tools for ANDINA Stock
When running ANDINA BOTTLING's price analysis, check to measure ANDINA BOTTLING'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 ANDINA BOTTLING is operating at the current time. Most of ANDINA BOTTLING's value examination focuses on studying past and present price action to predict the probability of ANDINA BOTTLING's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move ANDINA BOTTLING's price. Additionally, you may evaluate how the addition of ANDINA BOTTLING to your portfolios can decrease your overall portfolio volatility.
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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.