Ocean Thermal Debt
| CPWRDelisted Stock | USD 0.01 0.00 0.00% |
Ocean Thermal Energy holds a debt-to-equity ratio of 0.01. . Ocean Thermal's financial risk is the risk to Ocean Thermal stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Ocean Thermal'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. Ocean Thermal'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 Ocean Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect Ocean Thermal's stakeholders.
For most companies, including Ocean Thermal, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Ocean Thermal Energy, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Ocean Thermal'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 Ocean Thermal'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 Ocean Thermal 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 Ocean Thermal to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Ocean Thermal is said to be less leveraged. If creditors hold a majority of Ocean Thermal's assets, the Company is said to be highly leveraged.
Ocean |
Ocean Thermal Energy Debt to Cash Allocation
Many companies such as Ocean Thermal, 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.
Ocean Thermal Energy currently holds 226.79 K in liabilities with Debt to Equity (D/E) ratio of 0.01, which may suggest the company is not taking enough advantage from borrowing. Debt can assist Ocean Thermal until it has trouble settling it off, either with new capital or with free cash flow. So, Ocean Thermal'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 Ocean Thermal Energy sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Ocean to invest in growth at high rates of return. When we think about Ocean Thermal's use of debt, we should always consider it together with cash and equity.Ocean Thermal 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 Ocean Thermal's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Ocean Thermal, which in turn will lower the firm's financial flexibility.Ocean Thermal Corporate Bonds Issued
Understaning Ocean Thermal Use of Financial Leverage
Ocean Thermal's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Ocean Thermal's current equity. If creditors own a majority of Ocean Thermal's assets, the company is considered highly leveraged. Understanding the composition and structure of Ocean Thermal's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Ocean Thermal Energy Corporation, together with its subsidiaries, engages in the development of projects for renewable power generation, desalinated water production, and air conditioning worldwide. The company was founded in 1998 and is headquartered in Lancaster, Pennsylvania. Ocean Thermal operates under UtilitiesRenewable classification in the United States and is traded on OTC Exchange. It employs 3 people. Please read more on our technical analysis page.
Pair Trading with Ocean Thermal
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 Ocean Thermal 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 Ocean Thermal will appreciate offsetting losses from the drop in the long position's value.Moving against Ocean Pink Sheet
| 0.35 | VCSA | Vacasa Inc Trending | PairCorr |
| 0.34 | DV | DoubleVerify Holdings | PairCorr |
| 0.34 | DTRK | DATATRAK International | PairCorr |
The ability to find closely correlated positions to Ocean Thermal could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Ocean Thermal 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 Ocean Thermal - 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 Ocean Thermal Energy to buy it.
The correlation of Ocean Thermal 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 Ocean Thermal moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Ocean Thermal Energy 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 Ocean Thermal 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.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 housing. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Consideration for investing in Ocean Pink Sheet
If you are still planning to invest in Ocean Thermal Energy 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 Ocean Thermal'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.