Espey Mfg Debt
| ESP Stock | USD 29.48 0.54 1.87% |
Espey Mfg Electronics holds a debt-to-equity ratio of 0.29. As of 11/25/2024, Net Debt is likely to drop to about (4.6 M). In addition to that, Short Term Debt is likely to grow to about (8.6 M). Espey Mfg's financial risk is the risk to Espey Mfg stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Espey Mfg'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. Espey Mfg'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 Espey Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Espey Mfg's stakeholders.
For most companies, including Espey Mfg, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Espey Mfg Electronics, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Espey Mfg's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 1.9363 | Book Value 16.363 | Operating Margin 0.1836 | Profit Margin 0.1501 | Return On Assets 0.0786 |
Espey |
Espey Mfg Bond Ratings
Espey Mfg Electronics financial ratings play a critical role in determining how much Espey Mfg 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 Espey Mfg's borrowing costs.| Piotroski F Score | 6 | Healthy | View |
| Beneish M Score | (3.47) | Unlikely Manipulator | View |
Espey Mfg Electronics Debt to Cash Allocation
Espey Mfg Electronics has 15.27 M in debt with debt to equity (D/E) ratio of 0.29, which may show that the company is not taking advantage of profits from borrowing. Espey Mfg Electronics has a current ratio of 4.77, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Espey to invest in growth at high rates of return.Espey Mfg Total Assets Over Time
Espey Mfg 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 Espey Mfg's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Espey Mfg, which in turn will lower the firm's financial flexibility.Espey Mfg Corporate Bonds Issued
Espey Net Debt
Understaning Espey Mfg Use of Financial Leverage
Espey Mfg's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Espey Mfg's current equity. If creditors own a majority of Espey Mfg's assets, the company is considered highly leveraged. Understanding the composition and structure of Espey Mfg's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
| Last Reported | Projected for Next Year | ||
| Net Debt | -4.4 M | -4.6 M | |
| Short Term Debt | -9 M | -8.6 M | |
| Net Debt To EBITDA | (0.62) | (0.65) | |
| Interest Debt Per Share | 0.01 | 0.01 |
Pair Trading with Espey Mfg
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Espey Mfg position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Espey Mfg will appreciate offsetting losses from the drop in the long position's value.Moving against Espey Stock
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| 0.49 | EPOW | Sunrise New Energy | PairCorr |
The ability to find closely correlated positions to Espey Mfg could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Espey Mfg when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Espey Mfg - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Espey Mfg Electronics to buy it.
The correlation of Espey Mfg is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Espey Mfg moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Espey Mfg Electronics moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Espey Mfg can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Additional Tools for Espey Stock Analysis
When running Espey Mfg's price analysis, check to measure Espey Mfg's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Espey Mfg is operating at the current time. Most of Espey Mfg's value examination focuses on studying past and present price action to predict the probability of Espey Mfg's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Espey Mfg's price. Additionally, you may evaluate how the addition of Espey Mfg to your portfolios can decrease your overall portfolio volatility.
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.