Chesapeake Utilities Debt
| CPK Stock | USD 132.32 1.93 1.48% |
Chesapeake Utilities holds a debt-to-equity ratio of 0.932. At this time, Chesapeake Utilities' Interest Debt Per Share is quite stable compared to the past year. Total Debt To Capitalization is expected to rise to 0.54 this year, although the value of Debt To Equity will most likely fall to 1.08. . Chesapeake Utilities' financial risk is the risk to Chesapeake Utilities stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Chesapeake Utilities' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Chesapeake Utilities' 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 Chesapeake Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Chesapeake Utilities' stakeholders.
Chesapeake Utilities Quarterly Net Debt |
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For most companies, including Chesapeake Utilities, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Chesapeake Utilities, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Chesapeake Utilities' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 2.2246 | Book Value 59.921 | Operating Margin 0.2603 | Profit Margin 0.1416 | Return On Assets 0.0476 |
Given that Chesapeake Utilities' 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 Chesapeake Utilities 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 Chesapeake Utilities to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Chesapeake Utilities is said to be less leveraged. If creditors hold a majority of Chesapeake Utilities' assets, the Company is said to be highly leveraged.
At this time, Chesapeake Utilities' Liabilities And Stockholders Equity is quite stable compared to the past year. Non Current Liabilities Total is expected to rise to about 1.8 B this year, although the value of Total Current Liabilities will most likely fall to about 199.4 M. Chesapeake |
Chesapeake Utilities Bond Ratings
Chesapeake Utilities financial ratings play a critical role in determining how much Chesapeake Utilities have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Chesapeake Utilities' borrowing costs.| Piotroski F Score | 6 | Healthy | View |
| Beneish M Score | (2.79) | Unlikely Manipulator | View |
Chesapeake Utilities Debt to Cash Allocation
Chesapeake Utilities has 1.4 B in debt with debt to equity (D/E) ratio of 0.93, which is OK given its current industry classification. Chesapeake Utilities has a current ratio of 0.49, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Note however, debt could still be an excellent tool for Chesapeake to invest in growth at high rates of return.Chesapeake Utilities Common Stock Shares Outstanding Over Time
Chesapeake Utilities Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Chesapeake Utilities 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.Chesapeake Utilities Debt Ratio | 26.0 |
Chesapeake Utilities Corporate Bonds Issued
Chesapeake Utilities issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Chesapeake Utilities uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt.
Chesapeake Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Chesapeake Utilities Use of Financial Leverage
Leverage ratios show Chesapeake Utilities' 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 Chesapeake Utilities' 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 | 1.4 B | 1.5 B | |
| Net Debt | 1.4 B | 1.5 B | |
| Short Term Debt | 198.4 M | 106.7 M | |
| Long Term Debt | 1.2 B | 1.2 B | |
| Long Term Debt Total | 665.1 M | 339.7 M | |
| Short and Long Term Debt | 198.4 M | 214.6 M | |
| Net Debt To EBITDA | 5.84 | 6.13 | |
| Debt To Equity | 1.11 | 1.08 | |
| Interest Debt Per Share | 77.43 | 81.30 | |
| Debt To Assets | 0.42 | 0.26 | |
| Long Term Debt To Capitalization | 0.49 | 0.42 | |
| Total Debt To Capitalization | 0.53 | 0.54 | |
| Debt Equity Ratio | 1.11 | 1.08 | |
| Debt Ratio | 0.42 | 0.26 | |
| Cash Flow To Debt Ratio | 0.15 | 0.14 |
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Is Gas Utilities space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Chesapeake Utilities. If investors know Chesapeake will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Chesapeake Utilities listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.472 | Dividend Share 2.46 | Earnings Share 4.92 | Revenue Per Share 34.76 | Quarterly Revenue Growth 0.217 |
The market value of Chesapeake Utilities is measured differently than its book value, which is the value of Chesapeake that is recorded on the company's balance sheet. Investors also form their own opinion of Chesapeake Utilities' value that differs from its market value or its book value, called intrinsic value, which is Chesapeake Utilities' 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 Chesapeake Utilities' market value can be influenced by many factors that don't directly affect Chesapeake Utilities' 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 Chesapeake Utilities' value and its price as these two are different measures arrived at by different means. Investors typically determine if Chesapeake Utilities is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Chesapeake Utilities' 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.