Ellsworth Convertible Corporate Bonds and Leverage Analysis
| ECF Stock | USD 9.91 0.08 0.81% |
The current Net Debt is estimated to decrease to about (41.5 K). The current Net Debt To EBITDA is estimated to decrease to -0.0066. Ellsworth Convertible's financial risk is the risk to Ellsworth Convertible stockholders that is caused by an increase in debt.
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.000075 | Current Value 0.000067 | Quarterly Volatility 0.00000467 |
Ellsworth |
Given the importance of Ellsworth Convertible's capital structure, the first step in the capital decision process is for the management of Ellsworth Convertible 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 Ellsworth Convertible Growth to issue bonds at a reasonable cost.
Ellsworth Convertible Bond Ratings
Ellsworth Convertible Growth financial ratings play a critical role in determining how much Ellsworth Convertible have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Ellsworth Convertible's borrowing costs.| Piotroski F Score | 8 | Strong | View |
| Beneish M Score | (4.69) | Unlikely Manipulator | View |
Ellsworth Convertible Debt to Cash Allocation
Many companies such as Ellsworth Convertible, 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.
Ellsworth Convertible Growth has 42.62 M in debt. Ellsworth Convertible has a current ratio of 0.74, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Note however, debt could still be an excellent tool for Ellsworth to invest in growth at high rates of return. Ellsworth Convertible Common Stock Shares Outstanding Over Time
Ellsworth Convertible Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Ellsworth Convertible uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Ellsworth Convertible Debt Ratio | 0.0067 |
Ellsworth Convertible Corporate Bonds Issued
Most Ellsworth bonds can be classified according to their maturity, which is the date when Ellsworth Convertible Growth 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.
Ellsworth Net Debt
Net Debt |
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Understaning Ellsworth Convertible Use of Financial Leverage
Ellsworth Convertible's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Ellsworth Convertible's total debt position, including all outstanding debt obligations, and compares it with Ellsworth Convertible's equity. Financial leverage can amplify the potential profits to Ellsworth Convertible's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Ellsworth Convertible is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | -39.5 K | -41.5 K | |
| Net Debt To EBITDA | (0.01) | (0.01) |
Currently Active Assets on Macroaxis
When determining whether Ellsworth Convertible is a strong investment it is important to analyze Ellsworth Convertible'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 Ellsworth Convertible's future performance. For an informed investment choice regarding Ellsworth Stock, refer to the following important reports:Check out the analysis of Ellsworth Convertible Fundamentals Over Time. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Is Asset Management & Custody Banks 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 Ellsworth Convertible. If investors know Ellsworth 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 Ellsworth Convertible listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.456 | Dividend Share 0.52 | Earnings Share 0.46 | Revenue Per Share 0.432 | Quarterly Revenue Growth 0.184 |
The market value of Ellsworth Convertible is measured differently than its book value, which is the value of Ellsworth that is recorded on the company's balance sheet. Investors also form their own opinion of Ellsworth Convertible's value that differs from its market value or its book value, called intrinsic value, which is Ellsworth Convertible'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 Ellsworth Convertible's market value can be influenced by many factors that don't directly affect Ellsworth Convertible'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 Ellsworth Convertible's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ellsworth Convertible is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ellsworth Convertible'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.