Soar Technology Debt
| FLYADelisted Stock | USD 10.41 0.01 0.1% |
Soar Technology's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Soar Technology's financial risk is the risk to Soar Technology stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Given that Soar Technology's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Soar Technology is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Soar Technology to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Soar Technology is said to be less leveraged. If creditors hold a majority of Soar Technology's assets, the Company is said to be highly leveraged.
Soar |
Soar Technology Acqu Debt to Cash Allocation
As Soar Technology Acquisition follows its natural business cycle, the capital allocation decisions will not magically go away. Soar Technology's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Soar Technology Acquisition currently holds 132.45 K in liabilities. Soar Technology Acqu has a current ratio of 24.94, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Soar Technology's use of debt, we should always consider it together with its cash and equity.Soar Technology 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 Soar Technology's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Soar Technology, which in turn will lower the firm's financial flexibility.Soar Technology Corporate Bonds Issued
Most Soar bonds can be classified according to their maturity, which is the date when Soar Technology Acquisition 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.
Understaning Soar Technology Use of Financial Leverage
Soar Technology's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Soar Technology's total debt position, including all outstanding debt obligations, and compares it with Soar Technology's equity. Financial leverage can amplify the potential profits to Soar Technology's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Soar Technology is unable to cover its debt costs.
SOAR Technology Acquisition Corp. does not significant operations. The company was incorporated in 2021 and is based in New York, New York. Soar Technology is traded on New York Stock Exchange in the United States. Please read more on our technical analysis page.
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.Check out Investing Opportunities to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in manufacturing. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Consideration for investing in Soar Stock
If you are still planning to invest in Soar Technology Acqu 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 Soar Technology's history and understand the potential risks before investing.
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |
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.