Crawford United Debt
| CRAWADelisted Stock | USD 26.22 0.17 0.65% |
Crawford United holds a debt-to-equity ratio of 0.946. With a high degree of financial leverage come high-interest payments, which usually reduce Crawford United's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Crawford United'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. Crawford United'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 Crawford Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect Crawford United's stakeholders.
For most companies, including Crawford United, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Crawford United, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Crawford United'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 Crawford United'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 Crawford United 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 Crawford United to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Crawford United is said to be less leveraged. If creditors hold a majority of Crawford United's assets, the Company is said to be highly leveraged.
Crawford |
Crawford United Debt to Cash Allocation
Crawford United has accumulated 20.45 M in total debt with debt to equity ratio (D/E) of 0.95, which is about average as compared to similar companies. Crawford United has a current ratio of 1.76, which is within standard range for the sector. Debt can assist Crawford United until it has trouble settling it off, either with new capital or with free cash flow. So, Crawford United'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 Crawford United sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Crawford to invest in growth at high rates of return. When we think about Crawford United's use of debt, we should always consider it together with cash and equity.Crawford United 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 Crawford United's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Crawford United, which in turn will lower the firm's financial flexibility.Crawford United Corporate Bonds Issued
Most Crawford bonds can be classified according to their maturity, which is the date when Crawford United 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 Crawford United Use of Financial Leverage
Crawford United's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Crawford United's total debt position, including all outstanding debt obligations, and compares it with Crawford United's equity. Financial leverage can amplify the potential profits to Crawford United's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Crawford United is unable to cover its debt costs.
Crawford United Corporation, together with its subsidiaries, provides specialty industrial products and solutions in the United States, Puerto Rico, Mexico, Canada, and internationally. Crawford United Corporation was founded in 1910 and is headquartered in Cleveland, Ohio. Crawford United operates under Specialty Industrial Machinery classification in the United States and is traded on OTC Exchange. It employs 451 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 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Consideration for investing in Crawford Pink Sheet
If you are still planning to invest in Crawford United 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 Crawford United's history and understand the potential risks before investing.
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |
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.