Grocery Outlet Debt
| GO Stock | USD 16.19 0.01 0.06% |
Grocery Outlet Holding holds a debt-to-equity ratio of 1.305. At this time, Grocery Outlet's Debt Equity Ratio is very stable compared to the past year. As of the 5th of February 2025, Debt Ratio is likely to grow to 0.61, while Short and Long Term Debt is likely to drop about 4.1 M. With a high degree of financial leverage come high-interest payments, which usually reduce Grocery Outlet's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Grocery Outlet'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. Grocery Outlet'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 Grocery Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Grocery Outlet's stakeholders.
Grocery Outlet Quarterly Net Debt |
|
For most companies, including Grocery Outlet, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Grocery Outlet Holding, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Grocery Outlet's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Grocery Outlet'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 Grocery Outlet 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 Grocery Outlet to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Grocery Outlet is said to be less leveraged. If creditors hold a majority of Grocery Outlet's assets, the Company is said to be highly leveraged.
As of the 5th of February 2025, Change To Liabilities is likely to grow to about 43.2 M, while Total Current Liabilities is likely to drop about 223.6 M. Grocery |
Grocery Outlet Bond Ratings
Grocery Outlet Holding financial ratings play a critical role in determining how much Grocery Outlet 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 Grocery Outlet's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (3.56) | Unlikely Manipulator | View |
Grocery Outlet Holding Debt to Cash Allocation
As Grocery Outlet Holding follows its natural business cycle, the capital allocation decisions will not magically go away. Grocery Outlet'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.
Grocery Outlet Holding reports 1.39 B of total liabilities with total debt to equity ratio (D/E) of 1.31, which is normal for its line of buisiness. Grocery Outlet Holding has a current ratio of 1.6, which is generally considered normal. Note however, debt could still be an excellent tool for Grocery to invest in growth at high rates of return. Grocery Outlet Common Stock Shares Outstanding Over Time
Grocery Outlet Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Grocery Outlet 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.Grocery Outlet Debt Ratio | 61.0 |
Grocery Outlet Corporate Bonds Issued
Grocery Long Term Debt
Long Term Debt |
|
Understaning Grocery Outlet Use of Financial Leverage
Leverage ratios show Grocery Outlet'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 Grocery Outlet'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 | ||
| Long Term Debt | 258.4 M | 357.1 M | |
| Short and Long Term Debt | 6.5 M | 4.1 M | |
| Short Term Debt | 79.8 M | 44.5 M | |
| Short and Long Term Debt Total | 1.6 B | 1.3 B | |
| Net Debt | 1.5 B | 1.3 B | |
| Long Term Debt Total | 341.7 M | 438.6 M | |
| Net Debt To EBITDA | 6.82 | 5.96 | |
| Debt To Equity | 1.47 | 1.82 | |
| Interest Debt Per Share | 13.32 | 11.29 | |
| Debt To Assets | 0.59 | 0.61 | |
| Long Term Debt To Capitalization | 0.29 | 0.44 | |
| Total Debt To Capitalization | 0.64 | 0.67 | |
| Debt Equity Ratio | 1.47 | 1.82 | |
| Debt Ratio | 0.59 | 0.61 | |
| Cash Flow To Debt Ratio | 0.12 | 0.10 |
Pair Trading with Grocery Outlet
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 Grocery Outlet 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 Grocery Outlet will appreciate offsetting losses from the drop in the long position's value.Moving together with Grocery Stock
| 0.66 | BG | Bunge Limited Earnings Call Today | PairCorr |
Moving against Grocery Stock
The ability to find closely correlated positions to Grocery Outlet could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Grocery Outlet 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 Grocery Outlet - 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 Grocery Outlet Holding to buy it.
The correlation of Grocery Outlet 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 Grocery Outlet moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Grocery Outlet Holding 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 Grocery Outlet 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.Check out the analysis of Grocery Outlet Fundamentals Over Time. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Is Consumer Staples Distribution & Retail 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 Grocery Outlet. If investors know Grocery 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 Grocery Outlet 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 (0.11) | Earnings Share 0.53 | Revenue Per Share | Quarterly Revenue Growth 0.104 | Return On Assets |
The market value of Grocery Outlet Holding is measured differently than its book value, which is the value of Grocery that is recorded on the company's balance sheet. Investors also form their own opinion of Grocery Outlet's value that differs from its market value or its book value, called intrinsic value, which is Grocery Outlet'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 Grocery Outlet's market value can be influenced by many factors that don't directly affect Grocery Outlet'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 Grocery Outlet's value and its price as these two are different measures arrived at by different means. Investors typically determine if Grocery Outlet is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Grocery Outlet'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.