Ionic Inflation Debt
| CPII Etf | USD 19.52 0.15 0.76% |
Ionic Inflation Prot holds a debt-to-equity ratio of 1.6. With a high degree of financial leverage come high-interest payments, which usually reduce Ionic Inflation's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Ionic Inflation'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. Ionic Inflation'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 Ionic Etf's retail investors understand whether an upcoming fall or rise in the market will negatively affect Ionic Inflation's stakeholders.
For most companies, including Ionic Inflation, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Ionic Inflation Protection, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Ionic Inflation'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 12.3 M |
Given that Ionic Inflation'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 Ionic Inflation 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 Ionic Inflation to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Ionic Inflation is said to be less leveraged. If creditors hold a majority of Ionic Inflation's assets, the ETF is said to be highly leveraged.
Ionic |
Ionic Inflation Prot Debt to Cash Allocation
Ionic Inflation Protection currently holds 194.93 M in liabilities with Debt to Equity (D/E) ratio of 1.6, which is about average as compared to similar companies. Ionic Inflation Prot has a current ratio of 1.3, suggesting that it is in a questionable position to pay out its financial obligations when due. Debt can assist Ionic Inflation until it has trouble settling it off, either with new capital or with free cash flow. So, Ionic Inflation'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 Ionic Inflation Prot sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Ionic to invest in growth at high rates of return. When we think about Ionic Inflation's use of debt, we should always consider it together with cash and equity.Ionic Inflation 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 Ionic Inflation's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Ionic Inflation, which in turn will lower the firm's financial flexibility.Ionic Inflation Corporate Bonds Issued
Most Ionic bonds can be classified according to their maturity, which is the date when Ionic Inflation Protection has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Understaning Ionic Inflation Use of Financial Leverage
Understanding the composition and structure of Ionic Inflation's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Ionic Inflation's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
The fund is an actively-managed exchange-traded fund that seeks to achieve its investment objective by investing in inflation swaps options on U.S. interest rates and U.S. Ionic Inflation is traded on NYSEARCA Exchange in the United States. Please read more on our technical analysis page.
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When determining whether Ionic Inflation Prot offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Ionic Inflation's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Ionic Inflation Protection Etf. Outlined below are crucial reports that will aid in making a well-informed decision on Ionic Inflation Protection Etf:Check out the analysis of Ionic Inflation Fundamentals Over Time. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
The market value of Ionic Inflation Prot is measured differently than its book value, which is the value of Ionic that is recorded on the company's balance sheet. Investors also form their own opinion of Ionic Inflation's value that differs from its market value or its book value, called intrinsic value, which is Ionic Inflation'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 Ionic Inflation's market value can be influenced by many factors that don't directly affect Ionic Inflation'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 Ionic Inflation's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ionic Inflation is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ionic Inflation'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.