Grupo Financiero Galicia Corporate Bonds and Leverage Analysis
| GGAL Stock | USD 55.51 0.03 0.05% |
At this time, Grupo Financiero's Interest Debt Per Share is quite stable compared to the past year. Cash Flow To Debt Ratio is expected to rise to 12.96 this year, although the value of Long Term Debt Total will most likely fall to about 24.4 B. . Grupo Financiero's financial risk is the risk to Grupo Financiero stockholders that is caused by an increase in debt.
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.01321945 | Current Value 0.0126 | Quarterly Volatility 0.04053408 |
Grupo |
Given the importance of Grupo Financiero's capital structure, the first step in the capital decision process is for the management of Grupo Financiero 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 Grupo Financiero Galicia to issue bonds at a reasonable cost.
Grupo Financiero Bond Ratings
Grupo Financiero Galicia financial ratings play a critical role in determining how much Grupo Financiero 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 Grupo Financiero's borrowing costs.| Piotroski F Score | 1 | Very Weak | View |
| Beneish M Score | (1.32) | Possible Manipulator | View |
Grupo Financiero Galicia Debt to Cash Allocation
Many companies such as Grupo Financiero, 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.
Grupo Financiero Galicia currently holds 491.99 B in liabilities. Note, when we think about Grupo Financiero's use of debt, we should always consider it together with its cash and equity.Grupo Financiero Total Assets Over Time
Grupo Financiero Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Grupo Financiero 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.Grupo Financiero Debt Ratio | 1.26 |
Grupo Financiero Corporate Bonds Issued
Grupo Financiero issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Grupo Financiero Galicia uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt.
Grupo Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning Grupo Financiero Use of Financial Leverage
Leverage ratios show Grupo Financiero'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 Grupo Financiero'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 | ||
| Short and Long Term Debt Total | 492 B | 516.6 B | |
| Net Debt | 2.4 T | 2.5 T | |
| Long Term Debt | 436.3 B | 458.1 B | |
| Short Term Debt | 333.2 B | 349.9 B | |
| Short and Long Term Debt | 8.5 B | 4.7 B | |
| Long Term Debt Total | 47.4 B | 24.4 B | |
| Net Debt To EBITDA | 13.70 | 14.38 | |
| Debt To Equity | 0.07 | 0.06 | |
| Interest Debt Per Share | 2.1 K | 2.3 K | |
| Debt To Assets | 0.01 | 0.01 | |
| Long Term Debt To Capitalization | 0.06 | 0.06 | |
| Total Debt To Capitalization | 0.06 | 0.06 | |
| Debt Equity Ratio | 0.07 | 0.06 | |
| Debt Ratio | 0.01 | 0.01 | |
| Cash Flow To Debt Ratio | 12.35 | 12.96 |
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectCheck out the analysis of Grupo Financiero Fundamentals Over Time. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Is Diversified 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 Grupo Financiero. If investors know Grupo 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 Grupo Financiero 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 2.106 | Earnings Share 2.27 | Revenue Per Share 4.5 K | Quarterly Revenue Growth 1.343 | Return On Assets 0.0685 |
The market value of Grupo Financiero Galicia is measured differently than its book value, which is the value of Grupo that is recorded on the company's balance sheet. Investors also form their own opinion of Grupo Financiero's value that differs from its market value or its book value, called intrinsic value, which is Grupo Financiero'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 Grupo Financiero's market value can be influenced by many factors that don't directly affect Grupo Financiero'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 Grupo Financiero's value and its price as these two are different measures arrived at by different means. Investors typically determine if Grupo Financiero is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Grupo Financiero'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.