5E Advanced Debt
| FEAM Stock | USD 0.47 0.02 4.08% |
5E Advanced Materials holds a debt-to-equity ratio of 0.008. At this time, 5E Advanced's Long Term Debt To Capitalization is very stable compared to the past year. As of the 18th of January 2025, Total Debt To Capitalization is likely to grow to 0.82, while Long Term Debt Total is likely to drop about 118.4 K. . 5E Advanced's financial risk is the risk to 5E Advanced stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
5E Advanced'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. 5E Advanced'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 FEAM Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect 5E Advanced's stakeholders.
For most companies, including 5E Advanced, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for 5E Advanced Materials, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, 5E Advanced's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
At this time, 5E Advanced's Total Current Liabilities is very stable compared to the past year. As of the 18th of January 2025, Non Current Liabilities Total is likely to grow to about 83.4 M, while Liabilities And Stockholders Equity is likely to drop about 72.8 M. FEAM |
5E Advanced Bond Ratings
5E Advanced Materials financial ratings play a critical role in determining how much 5E Advanced 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 5E Advanced's borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | (6.54) | Unlikely Manipulator | View |
5E Advanced Materials Debt to Cash Allocation
Many companies such as 5E Advanced, 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.
5E Advanced Materials currently holds 68.48 M in liabilities with Debt to Equity (D/E) ratio of 0.01, which may suggest the company is not taking enough advantage from borrowing. 5E Advanced Materials has a current ratio of 4.32, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about 5E Advanced's use of debt, we should always consider it together with its cash and equity.5E Advanced Other Current Liab Over Time
5E Advanced Assets Financed by Debt
The debt-to-assets ratio shows the degree to which 5E Advanced 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.5E Advanced Debt Ratio | 72.0 |
5E Advanced Corporate Bonds Issued
FEAM Net Debt
Net Debt |
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Understaning 5E Advanced Use of Financial Leverage
Leverage ratios show 5E Advanced's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of 5E Advanced's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Net Debt | 73.1 M | 76.8 M | |
| Short and Long Term Debt Total | 78.7 M | 82.7 M | |
| Long Term Debt | 78.4 M | 82.3 M | |
| Short Term Debt | 210.4 K | 179.3 K | |
| Long Term Debt Total | 133.2 K | 118.4 K | |
| Short and Long Term Debt | 48.3 K | 44 K | |
| Net Debt To EBITDA | (2.38) | (2.26) | |
| Debt To Equity | 5.76 | 6.04 | |
| Interest Debt Per Share | 1.28 | 1.34 | |
| Debt To Assets | 0.69 | 0.72 | |
| Long Term Debt To Capitalization | 0.78 | 0.82 | |
| Total Debt To Capitalization | 0.78 | 0.82 | |
| Debt Equity Ratio | 5.76 | 6.04 | |
| Debt Ratio | 0.69 | 0.72 | |
| Cash Flow To Debt Ratio | (0.35) | (0.37) |
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Is Diversified Metals & Mining 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 5E Advanced. If investors know FEAM 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 5E Advanced 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 5E Advanced Materials is measured differently than its book value, which is the value of FEAM that is recorded on the company's balance sheet. Investors also form their own opinion of 5E Advanced's value that differs from its market value or its book value, called intrinsic value, which is 5E Advanced'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 5E Advanced's market value can be influenced by many factors that don't directly affect 5E Advanced'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 5E Advanced's value and its price as these two are different measures arrived at by different means. Investors typically determine if 5E Advanced is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, 5E Advanced'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.