Brookfield Infrastructure Debt
| BIPC Stock | CAD 62.42 0.24 0.38% |
At this time, Brookfield Infrastructure's Debt To Assets are very stable compared to the past year. As of the 26th of November 2024, Debt Ratio is likely to grow to 0.53, while Long Term Debt is likely to drop about 5.6 B. With a high degree of financial leverage come high-interest payments, which usually reduce Brookfield Infrastructure's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.50416161 | Current Value 0.53 | Quarterly Volatility 0.16174624 |
Given that Brookfield Infrastructure'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 Brookfield Infrastructure 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 Brookfield Infrastructure to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Brookfield Infrastructure is said to be less leveraged. If creditors hold a majority of Brookfield Infrastructure's assets, the Company is said to be highly leveraged.
At this time, Brookfield Infrastructure's Total Current Liabilities is very stable compared to the past year. As of the 26th of November 2024, Change To Liabilities is likely to grow to about 282.6 M, while Liabilities And Stockholders Equity is likely to drop about 13 B. Brookfield |
Brookfield Infrastructure Debt to Cash Allocation
Brookfield Infrastructure Corp has accumulated 12.05 B in total debt. Brookfield Infrastructure has a current ratio of 0.25, 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 Brookfield Infrastructure until it has trouble settling it off, either with new capital or with free cash flow. So, Brookfield Infrastructure's 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 Brookfield Infrastructure sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Brookfield to invest in growth at high rates of return. When we think about Brookfield Infrastructure's use of debt, we should always consider it together with cash and equity.Brookfield Infrastructure Common Stock Shares Outstanding Over Time
Brookfield Infrastructure Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Brookfield Infrastructure 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.Brookfield Infrastructure Debt Ratio | 53.0 |
Brookfield Infrastructure Corporate Bonds Issued
Brookfield Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Brookfield Infrastructure Use of Financial Leverage
Leverage ratios show Brookfield Infrastructure's 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 Brookfield Infrastructure's 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 | ||
| Short and Long Term Debt Total | 12.1 B | 12.7 B | |
| Net Debt | 11.5 B | 12.1 B | |
| Long Term Debt | 11 B | 5.6 B | |
| Long Term Debt Total | 4.1 B | 4.1 B | |
| Short Term Debt | 1 B | 1.1 B | |
| Short and Long Term Debt | 1 B | 1.1 B | |
| Net Debt To EBITDA | 5.66 | 2.89 | |
| Debt To Equity | (30.21) | (28.70) | |
| Interest Debt Per Share | 96.69 | 101.53 | |
| Debt To Assets | 0.50 | 0.53 | |
| Long Term Debt To Capitalization | 0.93 | 0.71 | |
| Total Debt To Capitalization | 1.03 | 0.59 | |
| Debt Equity Ratio | (30.21) | (28.70) | |
| Debt Ratio | 0.50 | 0.53 | |
| Cash Flow To Debt Ratio | 0.09 | 0.08 |
Pair Trading with Brookfield Infrastructure
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Brookfield Infrastructure position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brookfield Infrastructure will appreciate offsetting losses from the drop in the long position's value.Moving against Brookfield Stock
The ability to find closely correlated positions to Brookfield Infrastructure could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Brookfield Infrastructure when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Brookfield Infrastructure - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Brookfield Infrastructure Corp to buy it.
The correlation of Brookfield Infrastructure is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Brookfield Infrastructure moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Brookfield Infrastructure moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Brookfield Infrastructure can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of Brookfield Infrastructure Fundamentals Over Time. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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.