Xtrackers California Current Debt
| CA Etf | USD 25.50 0.08 0.31% |
Xtrackers California has over 2.92 Billion in debt which may indicate that it relies heavily on debt financing. With a high degree of financial leverage come high-interest payments, which usually reduce Xtrackers California's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Xtrackers California'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. Xtrackers California's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the ETF is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Xtrackers Etf's retail investors understand whether an upcoming fall or rise in the market will negatively affect Xtrackers California's stakeholders.
For most companies, including Xtrackers California, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Xtrackers California Municipal, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Xtrackers California's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Total Assets 22.7 M |
Given that Xtrackers California's debt-to-equity ratio measures a ETF's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Xtrackers California 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 Xtrackers California to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Xtrackers California is said to be less leveraged. If creditors hold a majority of Xtrackers California's assets, the ETF is said to be highly leveraged.
Xtrackers |
Xtrackers California Debt to Cash Allocation
Xtrackers California Municipal reports 2.92 B of total liabilities with total debt to equity ratio (D/E) of 37.1, which implies that the company may not be able to produce enough cash to satisfy its debt commitments. Xtrackers California has a current ratio of 2.17, indicating that it is in good position to pay out its debt commitments in time. Debt can assist Xtrackers California until it has trouble settling it off, either with new capital or with free cash flow. So, Xtrackers California'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 Xtrackers California sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Xtrackers to invest in growth at high rates of return. When we think about Xtrackers California's use of debt, we should always consider it together with cash and equity.Xtrackers California 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 Xtrackers California's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Xtrackers California, which in turn will lower the firm's financial flexibility.Understaning Xtrackers California Use of Financial Leverage
Xtrackers California's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Xtrackers California's total debt position, including all outstanding debt obligations, and compares it with Xtrackers California's equity. Financial leverage can amplify the potential profits to Xtrackers California's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Xtrackers California is unable to cover its debt costs.
CA, Inc., doing business as CA technologies, develops, markets, delivers, and licenses software products and services in the United States and internationally. CA, Inc. was founded in 1974 and is headquartered in New York, New York. CA operates under Software - Infrastructure classification in USA and is traded on BATS Exchange. It employs 11300 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 the analysis of Xtrackers California Fundamentals Over Time. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
The market value of Xtrackers California is measured differently than its book value, which is the value of Xtrackers that is recorded on the company's balance sheet. Investors also form their own opinion of Xtrackers California's value that differs from its market value or its book value, called intrinsic value, which is Xtrackers California's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Xtrackers California's market value can be influenced by many factors that don't directly affect Xtrackers California's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Xtrackers California's value and its price as these two are different measures arrived at by different means. Investors typically determine if Xtrackers California is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Xtrackers California's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
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.