FutureFuel Corp Debt
| FF Stock | USD 5.14 0.06 1.15% |
FutureFuel Corp holds a debt-to-equity ratio of 0.001. The FutureFuel Corp's current Net Debt is estimated to increase to about (208.1 M). The current Short and Long Term Debt Total is estimated to decrease to about 369.6 K. FutureFuel Corp's financial risk is the risk to FutureFuel Corp stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
FutureFuel Corp'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. FutureFuel Corp'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 FutureFuel Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect FutureFuel Corp's stakeholders.
For most companies, including FutureFuel Corp, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for FutureFuel Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, FutureFuel Corp'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 1.0546 | Book Value 4.874 | Operating Margin (0.06) | Profit Margin 0.1318 | Return On Assets 0.0504 |
FutureFuel |
FutureFuel Corp Bond Ratings
FutureFuel Corp financial ratings play a critical role in determining how much FutureFuel Corp 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 FutureFuel Corp's borrowing costs.| Piotroski F Score | 4 | Poor | View |
| Beneish M Score | (1.73) | Possible Manipulator | View |
FutureFuel Corp Debt to Cash Allocation
Many companies such as FutureFuel Corp, 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.
FutureFuel Corp reports 389 K of total liabilities with total debt to equity ratio (D/E) of 0.0, which may suggest the company is not taking enough advantage from financial leverage. FutureFuel Corp has a current ratio of 4.08, indicating that it is in good position to pay out its debt commitments in time. Note however, debt could still be an excellent tool for FutureFuel to invest in growth at high rates of return. FutureFuel Corp Total Assets Over Time
FutureFuel Corp Assets Financed by Debt
The debt-to-assets ratio shows the degree to which FutureFuel Corp 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.FutureFuel Corp Debt Ratio | 1.86 |
FutureFuel Corp Corporate Bonds Issued
Most FutureFuel bonds can be classified according to their maturity, which is the date when FutureFuel Corp 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.
FutureFuel Net Debt
Net Debt |
|
Understaning FutureFuel Corp Use of Financial Leverage
FutureFuel Corp's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures FutureFuel Corp's total debt position, including all outstanding debt obligations, and compares it with FutureFuel Corp's equity. Financial leverage can amplify the potential profits to FutureFuel Corp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if FutureFuel Corp is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | -219.1 M | -208.1 M | |
| Short and Long Term Debt Total | 389 K | 369.6 K | |
| Short Term Debt | 389 K | 369.6 K | |
| Net Debt To EBITDA | (5.95) | (6.24) | |
| Debt To Equity | 0.03 | 0.03 | |
| Debt To Assets | 0.02 | 0.02 | |
| Total Debt To Capitalization | 0.03 | 0.02 | |
| Debt Equity Ratio | 0.03 | 0.03 | |
| Debt Ratio | 0.02 | 0.02 | |
| Cash Flow To Debt Ratio | 2.00 | 1.78 |
Currently Active Assets on Macroaxis
Check out the analysis of FutureFuel Corp Fundamentals Over Time. For more detail on how to invest in FutureFuel Stock please use our How to Invest in FutureFuel Corp guide.You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Is Specialty Chemicals 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 FutureFuel Corp. If investors know FutureFuel 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 FutureFuel Corp 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 (0.79) | Dividend Share 0.24 | Earnings Share 0.81 | Revenue Per Share 6.257 | Quarterly Revenue Growth (0.56) |
The market value of FutureFuel Corp is measured differently than its book value, which is the value of FutureFuel that is recorded on the company's balance sheet. Investors also form their own opinion of FutureFuel Corp's value that differs from its market value or its book value, called intrinsic value, which is FutureFuel Corp'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 FutureFuel Corp's market value can be influenced by many factors that don't directly affect FutureFuel Corp'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 FutureFuel Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine if FutureFuel Corp is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, FutureFuel Corp'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.