BSQUARE Debt
| BSQRDelisted Stock | USD 1.22 0.01 0.83% |
BSQUARE holds a debt-to-equity ratio of 0.041. . BSQUARE's financial risk is the risk to BSQUARE stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
BSQUARE'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. BSQUARE'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 BSQUARE Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect BSQUARE's stakeholders.
For most companies, including BSQUARE, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for BSQUARE, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, BSQUARE's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that BSQUARE'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 BSQUARE 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 BSQUARE to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, BSQUARE is said to be less leveraged. If creditors hold a majority of BSQUARE's assets, the Company is said to be highly leveraged.
BSQUARE |
BSQUARE Debt to Cash Allocation
Many companies such as BSQUARE, 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.
BSQUARE currently holds 1.41 M in liabilities with Debt to Equity (D/E) ratio of 0.04, which may suggest the company is not taking enough advantage from borrowing. BSQUARE has a current ratio of 5.7, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about BSQUARE's use of debt, we should always consider it together with its cash and equity.BSQUARE 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 BSQUARE's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of BSQUARE, which in turn will lower the firm's financial flexibility.BSQUARE Corporate Bonds Issued
Understaning BSQUARE Use of Financial Leverage
BSQUARE's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to BSQUARE's current equity. If creditors own a majority of BSQUARE's assets, the company is considered highly leveraged. Understanding the composition and structure of BSQUARE's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
BSQUARE Corporation develops and deploys technologies for the makers and operators of connected devices in North America, Europe, and Asia. BSQUARE Corporation was incorporated in 1994 and is headquartered in Seattle, Washington. Bsquare Corp operates under SoftwareApplication classification in the United States and is traded on NASDAQ Exchange. It employs 53 people. Please read more on our technical analysis page.
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 producer price index. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Consideration for investing in BSQUARE Stock
If you are still planning to invest in BSQUARE 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 BSQUARE's history and understand the potential risks before investing.
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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.