American Woodmark Debt
| AMWD Stock | USD 58.76 1.66 2.91% |
American Woodmark holds a debt-to-equity ratio of 0.722. At present, American Woodmark's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 49.8 M, whereas Net Debt To EBITDA is forecasted to decline to 2.24. American Woodmark's financial risk is the risk to American Woodmark stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
American Woodmark'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. American Woodmark'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 American Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect American Woodmark's stakeholders.
For most companies, including American Woodmark, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for American Woodmark, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, American Woodmark's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
At present, American Woodmark'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 569.5 M, whereas Non Current Liabilities Other is forecasted to decline to about 2.5 M. Check out the analysis of American Woodmark Financial Statements. American Woodmark Bond Ratings
American Woodmark financial ratings play a critical role in determining how much American Woodmark have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for American Woodmark's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (2.04) | Possible Manipulator | View |
American Woodmark Debt to Cash Allocation
Many companies such as American Woodmark, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
American Woodmark currently holds 509.93 M in liabilities with Debt to Equity (D/E) ratio of 0.72, which is about average as compared to similar companies. American Woodmark has a current ratio of 2.21, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about American Woodmark's use of debt, we should always consider it together with its cash and equity.American Woodmark Total Assets Over Time
American Woodmark Assets Financed by Debt
The debt-to-assets ratio shows the degree to which American Woodmark 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.American Woodmark Debt Ratio | 24.0 |
American Woodmark Corporate Bonds Issued
Most American bonds can be classified according to their maturity, which is the date when American Woodmark 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.
American Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning American Woodmark Use of Financial Leverage
American Woodmark's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures American Woodmark's total debt position, including all outstanding debt obligations, and compares it with American Woodmark's equity. Financial leverage can amplify the potential profits to American Woodmark's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if American Woodmark is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 586.4 M | 615.7 M | |
| Net Debt | 531 M | 557.5 M | |
| Short Term Debt | 47.4 M | 49.8 M | |
| Long Term Debt | 416.8 M | 437.6 M | |
| Long Term Debt Total | 424.8 M | 359 M | |
| Short and Long Term Debt | 4.5 M | 5 M | |
| Net Debt To EBITDA | 2.65 | 2.24 | |
| Debt To Equity | 0.64 | 0.59 | |
| Interest Debt Per Share | 30.60 | 32.13 | |
| Debt To Assets | 0.37 | 0.24 | |
| Long Term Debt To Capitalization | 0.33 | 0.28 | |
| Total Debt To Capitalization | 0.41 | 0.32 | |
| Debt Equity Ratio | 0.64 | 0.59 | |
| Debt Ratio | 0.37 | 0.24 | |
| Cash Flow To Debt Ratio | 0.19 | 0.18 |
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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 American Woodmark is a strong investment it is important to analyze American Woodmark'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 American Woodmark's future performance. For an informed investment choice regarding American Stock, refer to the following important reports:Check out the analysis of American Woodmark Financial Statements. For information on how to trade American Stock refer to our How to Trade American Stock guide.You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Will Building Products sector continue expanding? Could American diversify its offerings? Factors like these will boost the valuation of American Woodmark. If investors know American will grow in the future, the company's valuation will be higher. Accurate valuation requires analyzing both current fundamentals and future growth trajectories. Every American Woodmark data point contributes insight, yet successful analysis hinges on identifying the most consequential variables.
Quarterly Earnings Growth (0.77) | Earnings Share 4.24 | Revenue Per Share | Quarterly Revenue Growth (0.13) | Return On Assets |
Investors evaluate American Woodmark using market value (trading price) and book value (balance sheet equity), each telling a different story. Calculating American Woodmark's intrinsic value - the estimated true worth - helps identify when the stock trades at a discount or premium to fair value. Seasoned market participants apply comprehensive analytical frameworks to derive fundamental worth and identify mispriced opportunities. External factors like market trends, sector rotation, and investor psychology can cause American Woodmark's market price to deviate significantly from intrinsic value.
Understanding that American Woodmark's value differs from its trading price is crucial, as each reflects different aspects of the company. Evaluating whether American Woodmark represents a sound investment requires analyzing earnings trends, revenue growth, technical signals, industry dynamics, and expert forecasts. Conversely, American Woodmark's market price signifies the transaction level at which participants voluntarily complete trades.
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.