Arizona Metals Current Debt
| AMC Stock | 1.68 0.01 0.59% |
Arizona Metals Corp holds a debt-to-equity ratio of 0.77. As of the 25th of November 2024, Net Debt is likely to drop to about (577.9 K). In addition to that, Net Debt To EBITDA is likely to drop to 0.02 With a high degree of financial leverage come high-interest payments, which usually reduce Arizona Metals' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Arizona Metals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Arizona Metals' 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 Arizona Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Arizona Metals' stakeholders.
For most companies, including Arizona Metals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Arizona Metals Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Arizona Metals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 14.0735 | Book Value 0.258 | Return On Assets (0.55) | Return On Equity (0.85) |
Arizona |
Arizona Metals Corp Debt to Cash Allocation
Arizona Metals Corp has accumulated 1.53 M in total debt with debt to equity ratio (D/E) of 0.77, which is about average as compared to similar companies. Arizona Metals Corp has a current ratio of 0.16, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. Debt can assist Arizona Metals until it has trouble settling it off, either with new capital or with free cash flow. So, Arizona Metals' 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 Arizona Metals Corp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Arizona to invest in growth at high rates of return. When we think about Arizona Metals' use of debt, we should always consider it together with cash and equity.Arizona Metals Total Assets Over Time
Arizona Metals 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 Arizona Metals' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Arizona Metals, which in turn will lower the firm's financial flexibility.Arizona Net Debt
Understaning Arizona Metals Use of Financial Leverage
Leverage ratios show Arizona Metals' 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 Arizona Metals' 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 | ||
| Net Debt | -550.4 K | -577.9 K | |
| Net Debt To EBITDA | 0.02 | 0.02 |
Other Information on Investing in Arizona Stock
Arizona Metals financial ratios help investors to determine whether Arizona 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 Arizona with respect to the benefits of owning Arizona Metals 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.