Bright Scholar Education Corporate Bonds and Leverage Analysis
| BEDU Stock | USD 1.85 0.02 1.09% |
Bright Scholar Education holds a debt-to-equity ratio of 1.425. At this time, Bright Scholar's Net Debt is comparatively stable compared to the past year. Short and Long Term Debt Total is likely to gain to about 2 B in 2024, whereas Short Term Debt is likely to drop slightly above 137.1 M in 2024. . Bright Scholar's financial risk is the risk to Bright Scholar stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Bright Scholar'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. Bright Scholar'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 Bright Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Bright Scholar's stakeholders.
For most companies, including Bright Scholar, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Bright Scholar Education, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Bright Scholar'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 0.2773 | Book Value 47.851 | Operating Margin 0.088 | Profit Margin (0.16) | Return On Assets 0.0092 |
Bright |
Given the importance of Bright Scholar's capital structure, the first step in the capital decision process is for the management of Bright Scholar 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 Bright Scholar Education to issue bonds at a reasonable cost.
Bright Scholar Bond Ratings
Bright Scholar Education financial ratings play a critical role in determining how much Bright Scholar 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 Bright Scholar's borrowing costs.| Piotroski F Score | 6 | Healthy | View |
| Beneish M Score | (2.57) | Unlikely Manipulator | View |
Bright Scholar Education Debt to Cash Allocation
Bright Scholar Education currently holds 1.65 B in liabilities with Debt to Equity (D/E) ratio of 1.43, which is about average as compared to similar companies. Bright Scholar Education has a current ratio of 0.87, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Bright Scholar's use of debt, we should always consider it together with its cash and equity.Bright Scholar Total Assets Over Time
Bright Scholar Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Bright Scholar 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.Bright Scholar Debt Ratio | 2.34 |
Bright Scholar Corporate Bonds Issued
Bright Net Debt
Net Debt |
|
Understaning Bright Scholar Use of Financial Leverage
Bright Scholar's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Bright Scholar's current equity. If creditors own a majority of Bright Scholar's assets, the company is considered highly leveraged. Understanding the composition and structure of Bright Scholar's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
| Last Reported | Projected for Next Year | ||
| Net Debt | 1.3 B | 1.3 B | |
| Long Term Debt | 728 K | 691.6 K | |
| Short and Long Term Debt | 171.6 M | 163 M | |
| Short Term Debt | 144.3 M | 137.1 M | |
| Short and Long Term Debt Total | 1.9 B | 2 B | |
| Long Term Debt Total | 127.6 K | 134 K | |
| Net Debt To EBITDA | (11.70) | (11.11) | |
| Debt To Equity | 0.06 | 0.06 | |
| Interest Debt Per Share | 0.22 | 0.21 | |
| Debt To Assets | 0.02 | 0.02 | |
| Total Debt To Capitalization | 0.06 | 0.05 | |
| Debt Equity Ratio | 0.06 | 0.06 | |
| Debt Ratio | 0.02 | 0.02 | |
| Cash Flow To Debt Ratio | 0.35 | 0.33 |
Thematic Opportunities
Explore Investment Opportunities
Additional Tools for Bright Stock Analysis
When running Bright Scholar's price analysis, check to measure Bright Scholar'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 Bright Scholar is operating at the current time. Most of Bright Scholar's value examination focuses on studying past and present price action to predict the probability of Bright Scholar's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Bright Scholar's price. Additionally, you may evaluate how the addition of Bright Scholar to your portfolios can decrease your overall portfolio volatility.
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.