Century Petroleum Current Debt
Century Petroleum Corp has over 4,935 in debt which may indicate that it relies heavily on debt financing. As of November 26, 2024, Short and Long Term Debt is expected to decline to 3,007. In addition to that, Short Term Debt is expected to decline to 3,007. Century Petroleum's financial risk is the risk to Century Petroleum stockholders that is caused by an increase in debt.
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.0 | Current Value 0.0 | Quarterly Volatility 0.0 |
Given that Century Petroleum'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 Century Petroleum 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 Century Petroleum to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Century Petroleum is said to be less leveraged. If creditors hold a majority of Century Petroleum's assets, the Company is said to be highly leveraged.
As of November 26, 2024, Total Current Liabilities is expected to decline to 7,766. The current year's Change To Liabilities is expected to grow to -9,354Century |
Century Petroleum Corp Debt to Cash Allocation
Many companies such as Century Petroleum, 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.
Century Petroleum Corp currently holds 4.93 K in liabilities with Debt to Equity (D/E) ratio of 16.8, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Century Petroleum Corp has a current ratio of 0.01, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Century Petroleum's use of debt, we should always consider it together with its cash and equity.Century Petroleum Total Current Liabilities Over Time
Century Petroleum 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 Century Petroleum's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Century Petroleum, which in turn will lower the firm's financial flexibility.Century Short Long Term Debt
Short Long Term Debt |
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Understaning Century Petroleum Use of Financial Leverage
Century Petroleum's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Century Petroleum's total debt position, including all outstanding debt obligations, and compares it with Century Petroleum's equity. Financial leverage can amplify the potential profits to Century Petroleum's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Century Petroleum is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt | 5.7 K | 3 K | |
| Short Term Debt | 5.7 K | 3 K | |
| Net Debt | 4.4 K | 3.9 K | |
| Net Debt To EBITDA | 0.04 | 0.04 |
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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.When determining whether Century Petroleum Corp is a strong investment it is important to analyze Century Petroleum's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Century Petroleum's future performance. For an informed investment choice regarding Century Stock, refer to the following important reports:Check out the analysis of Century Petroleum Fundamentals Over Time. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Is Oil & Gas Exploration & Production 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 Century Petroleum. If investors know Century 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 Century Petroleum listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Century Petroleum Corp is measured differently than its book value, which is the value of Century that is recorded on the company's balance sheet. Investors also form their own opinion of Century Petroleum's value that differs from its market value or its book value, called intrinsic value, which is Century Petroleum'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 Century Petroleum's market value can be influenced by many factors that don't directly affect Century Petroleum'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 Century Petroleum's value and its price as these two are different measures arrived at by different means. Investors typically determine if Century Petroleum is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Century Petroleum'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.