Gulf Pacific Debt
| GUF Stock | CAD 0.45 0.00 0.00% |
Gulf Pacific Equities has over 29.71 Million in debt which may indicate that it relies heavily on debt financing. Net Debt is likely to climb to about 24.9 M in 2024, whereas Long Term Debt is likely to drop slightly above 18.5 M in 2024. . Gulf Pacific's financial risk is the risk to Gulf Pacific stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Gulf Pacific'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. Gulf Pacific'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 Gulf Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Gulf Pacific's stakeholders.
Gulf Pacific Quarterly Net Debt |
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For most companies, including Gulf Pacific, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Gulf Pacific Equities, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Gulf Pacific'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 0.4374 | Book Value 1.033 | Operating Margin 0.3809 | Profit Margin 0.1172 | Return On Assets 0.0218 |
Given that Gulf Pacific'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 Gulf Pacific 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 Gulf Pacific to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Gulf Pacific is said to be less leveraged. If creditors hold a majority of Gulf Pacific's assets, the Company is said to be highly leveraged.
At this time, Gulf Pacific's Total Current Liabilities is fairly stable compared to the past year. Change To Liabilities is likely to climb to about 285.9 K in 2024, whereas Non Current Liabilities Total is likely to drop slightly above 26.9 M in 2024. Gulf |
Gulf Pacific Equities Debt to Cash Allocation
Many companies such as Gulf Pacific, 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.
Gulf Pacific Equities has accumulated 29.71 M in total debt with debt to equity ratio (D/E) of 155.9, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Gulf Pacific Equities has a current ratio of 0.04, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. Debt can assist Gulf Pacific until it has trouble settling it off, either with new capital or with free cash flow. So, Gulf Pacific's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Gulf Pacific Equities sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Gulf to invest in growth at high rates of return. When we think about Gulf Pacific's use of debt, we should always consider it together with cash and equity.Gulf Pacific Total Assets Over Time
Gulf Pacific 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 Gulf Pacific's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Gulf Pacific, which in turn will lower the firm's financial flexibility.Gulf Pacific Corporate Bonds Issued
Gulf Long Term Debt
Long Term Debt |
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Understaning Gulf Pacific Use of Financial Leverage
Understanding the structure of Gulf Pacific's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Gulf Pacific's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 25.5 M | 18.5 M | |
| Short and Long Term Debt | 3.1 M | 2.8 M | |
| Net Debt | 24.7 M | 24.9 M |
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Additional Tools for Gulf Stock Analysis
When running Gulf Pacific's price analysis, check to measure Gulf Pacific's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Gulf Pacific is operating at the current time. Most of Gulf Pacific's value examination focuses on studying past and present price action to predict the probability of Gulf Pacific's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Gulf Pacific's price. Additionally, you may evaluate how the addition of Gulf Pacific to your portfolios can decrease your overall portfolio volatility.
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.