Dynatronics AerCap Bond

DYNTDelisted Stock  USD 0.20  0.00  0.00%   
Dynatronics holds a debt-to-equity ratio of 0.176. . Dynatronics' financial risk is the risk to Dynatronics stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Dynatronics' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Dynatronics' 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 Dynatronics Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Dynatronics' stakeholders.
For most companies, including Dynatronics, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Dynatronics, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Dynatronics' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
  
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Given the importance of Dynatronics' capital structure, the first step in the capital decision process is for the management of Dynatronics 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 Dynatronics to issue bonds at a reasonable cost.
Popular NameDynatronics AerCap Global Aviation
SpecializationMedical Devices
Equity ISIN CodeUS2681574016
Bond Issue ISIN CodeUS00773HAA59
S&P Rating
Others
Maturity Date15th of June 2045
Issuance DateOthers
Coupon6.5 %
View All Dynatronics Outstanding Bonds

Dynatronics Outstanding Bond Obligations

Understaning Dynatronics Use of Financial Leverage

Dynatronics' financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Dynatronics' current equity. If creditors own a majority of Dynatronics' assets, the company is considered highly leveraged. Understanding the composition and structure of Dynatronics' outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Dynatronics Corporation, a medical device company, designs, manufactures, and sells physical therapy, rehabilitation, orthopedics, pain management, and athletic training products in the United States. Dynatronics Corporation was founded in 1979 and is headquartered in Eagan, Minnesota. Dynatronics operates under Medical Devices classification in the United States and is traded on NASDAQ Exchange. It employs 195 people.
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Thematic Opportunities

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Other Consideration for investing in Dynatronics Stock

If you are still planning to invest in Dynatronics 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 Dynatronics' 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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.