Burzynski Research Debt
| BZYR Stock | USD 0.04 0.01 28.57% |
Burzynski Research's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Burzynski Research's financial risk is the risk to Burzynski Research stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Given that Burzynski Research'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 Burzynski Research 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 Burzynski Research to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Burzynski Research is said to be less leveraged. If creditors hold a majority of Burzynski Research's assets, the Company is said to be highly leveraged.
Burzynski |
Burzynski Research Debt to Cash Allocation
Many companies such as Burzynski Research, 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.
The company has a current ratio of 0.11, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Burzynski Research until it has trouble settling it off, either with new capital or with free cash flow. So, Burzynski Research'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 Burzynski Research sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Burzynski to invest in growth at high rates of return. When we think about Burzynski Research's use of debt, we should always consider it together with cash and equity.Burzynski Research 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 Burzynski Research's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Burzynski Research, which in turn will lower the firm's financial flexibility.Burzynski Research Corporate Bonds Issued
Understaning Burzynski Research Use of Financial Leverage
Burzynski Research's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Burzynski Research's current equity. If creditors own a majority of Burzynski Research's assets, the company is considered highly leveraged. Understanding the composition and structure of Burzynski Research's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Burzynski Research Institute, Inc. engages in the research and development of antineoplaston drugs to treat cancer. Burzynski Research Institute, Inc. was founded in 1977 and is based in Houston, Texas. Burzynski Research is traded on OTC Exchange in the United States. Please read more on our technical analysis page.
Pair Trading with Burzynski Research
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 Burzynski Research 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 Burzynski Research will appreciate offsetting losses from the drop in the long position's value.Moving against Burzynski Pink Sheet
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The ability to find closely correlated positions to Burzynski Research could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Burzynski Research 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 Burzynski Research - 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 Burzynski Research to buy it.
The correlation of Burzynski Research 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 Burzynski Research moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Burzynski Research 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 Burzynski Research 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.Additional Tools for Burzynski Pink Sheet Analysis
When running Burzynski Research's price analysis, check to measure Burzynski Research'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 Burzynski Research is operating at the current time. Most of Burzynski Research's value examination focuses on studying past and present price action to predict the probability of Burzynski Research's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Burzynski Research's price. Additionally, you may evaluate how the addition of Burzynski Research 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.