DICKS Sporting Goods 404280DR7 Bond
| DSG Stock | EUR 180.56 11.02 5.75% |
DICKS Sporting Goods has over 1.93 Billion in debt which may indicate that it relies heavily on debt financing. . DICKS Sporting's financial risk is the risk to DICKS Sporting stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
DICKS Sporting'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. DICKS Sporting'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 DICKS Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect DICKS Sporting's stakeholders.
For most companies, including DICKS Sporting, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for DICKS Sporting Goods, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, DICKS Sporting's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
DICKS |
Given the importance of DICKS Sporting's capital structure, the first step in the capital decision process is for the management of DICKS Sporting to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of DICKS Sporting Goods to issue bonds at a reasonable cost.
| Popular Name | DICKS Sporting HSBC Holdings PLC |
| Equity ISIN Code | US2533931026 |
| Bond Issue ISIN Code | US404280DR76 |
| S&P Rating | Others |
| Maturity Date | 3rd of November 2028 |
| Issuance Date | 3rd of November 2022 |
| Coupon | 7.39 % |
DICKS Sporting Goods Outstanding Bond Obligations
| Boeing Co 2196 | US097023DG73 | Details | |
| DKS 41 15 JAN 52 | US253393AG77 | Details | |
| DKS 315 15 JAN 32 | US253393AF94 | Details | |
| HSBC Holdings PLC | US404280DR76 | Details |
Understaning DICKS Sporting Use of Financial Leverage
DICKS Sporting's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures DICKS Sporting's total debt position, including all outstanding debt obligations, and compares it with DICKS Sporting's equity. Financial leverage can amplify the potential profits to DICKS Sporting's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if DICKS Sporting is unable to cover its debt costs.
DICKS Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. DICKS Sporting Goods, Inc. was founded in 1948 and is headquartered in Coraopolis, Pennsylvania. DICKS SPORTING operates under Specialty Retail classification in Germany and is traded on Frankfurt Stock Exchange. It employs 15200 people. Please read more on our technical analysis page.
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Additional Information and Resources on Investing in DICKS Stock
When determining whether DICKS Sporting Goods is a strong investment it is important to analyze DICKS Sporting'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 DICKS Sporting's future performance. For an informed investment choice regarding DICKS Stock, refer to the following important reports:Check out the analysis of DICKS Sporting Fundamentals Over Time. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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.