Axonics Modulation Corporate Bonds and Leverage Analysis
| AXNXDelisted Stock | USD 70.98 0.48 0.68% |
Axonics Modulation holds a debt-to-equity ratio of 0.022. With a high degree of financial leverage come high-interest payments, which usually reduce Axonics Modulation's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Axonics Modulation'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. Axonics Modulation'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 Axonics Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Axonics Modulation's stakeholders.
For most companies, including Axonics Modulation, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Axonics Modulation Technologies, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Axonics Modulation's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Axonics |
Given the importance of Axonics Modulation's capital structure, the first step in the capital decision process is for the management of Axonics Modulation to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Axonics Modulation Technologies to issue bonds at a reasonable cost.
Axonics Modulation Debt to Cash Allocation
As Axonics Modulation Technologies follows its natural business cycle, the capital allocation decisions will not magically go away. Axonics Modulation'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.
Axonics Modulation Technologies currently holds 27.62 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the company is not taking enough advantage from borrowing. Axonics Modulation has a current ratio of 10.28, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Axonics Modulation's use of debt, we should always consider it together with its cash and equity.Axonics Modulation 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 Axonics Modulation's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Axonics Modulation, which in turn will lower the firm's financial flexibility.Axonics Modulation Corporate Bonds Issued
Understaning Axonics Modulation Use of Financial Leverage
Understanding the structure of Axonics Modulation's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Axonics Modulation's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
Axonics, Inc., a medical technology company, engages in the development and commercialization of sacral neuromodulation systems. Axonics, Inc. was incorporated in 2012 and is based in Irvine, California. Axonics operates under Medical Devices classification in the United States and is traded on NASDAQ Exchange. It employs 517 people. Please read more on our technical analysis page.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Consideration for investing in Axonics Stock
If you are still planning to invest in Axonics Modulation check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Axonics Modulation's history and understand the potential risks before investing.
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |
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.