Hepion Pharmaceuticals Corporate Bonds and Leverage Analysis
| HEPA Stock | USD 0.66 0.03 4.35% |
Hepion Pharmaceuticals holds a debt-to-equity ratio of 0.001. At present, Hepion Pharmaceuticals' Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 359.9 K, whereas Net Debt is forecasted to decline to (15.3 M). With a high degree of financial leverage come high-interest payments, which usually reduce Hepion Pharmaceuticals' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Hepion Pharmaceuticals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Hepion Pharmaceuticals' 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 Hepion Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Hepion Pharmaceuticals' stakeholders.
For most companies, including Hepion Pharmaceuticals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Hepion Pharmaceuticals, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Hepion Pharmaceuticals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 2.1125 | Book Value 1.159 | Return On Assets (0.93) | Return On Equity (1.90) |
Hepion |
Given the importance of Hepion Pharmaceuticals' capital structure, the first step in the capital decision process is for the management of Hepion Pharmaceuticals 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 Hepion Pharmaceuticals to issue bonds at a reasonable cost.
Hepion Pharmaceuticals Bond Ratings
Hepion Pharmaceuticals financial ratings play a critical role in determining how much Hepion Pharmaceuticals 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 Hepion Pharmaceuticals' borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | (4.53) | Unlikely Manipulator | View |
Hepion Pharmaceuticals Debt to Cash Allocation
As Hepion Pharmaceuticals follows its natural business cycle, the capital allocation decisions will not magically go away. Hepion Pharmaceuticals' 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.
Hepion Pharmaceuticals currently holds 209.02 K in liabilities with Debt to Equity (D/E) ratio of 0.0, which may suggest the company is not taking enough advantage from borrowing. Hepion Pharmaceuticals has a current ratio of 8.59, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Hepion Pharmaceuticals' use of debt, we should always consider it together with its cash and equity.Hepion Pharmaceuticals Total Assets Over Time
Hepion Pharmaceuticals Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Hepion Pharmaceuticals 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.Hepion Pharmaceuticals Debt Ratio | 0.61 |
Hepion Pharmaceuticals Corporate Bonds Issued
Most Hepion bonds can be classified according to their maturity, which is the date when Hepion Pharmaceuticals 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.
Hepion Net Debt
Net Debt |
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Understaning Hepion Pharmaceuticals Use of Financial Leverage
Hepion Pharmaceuticals' financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Hepion Pharmaceuticals' total debt position, including all outstanding debt obligations, and compares it with Hepion Pharmaceuticals' equity. Financial leverage can amplify the potential profits to Hepion Pharmaceuticals' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Hepion Pharmaceuticals is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | -14.6 M | -15.3 M | |
| Short and Long Term Debt Total | 209 K | 360 K | |
| Short Term Debt | 231.8 K | 359.9 K | |
| Short and Long Term Debt | 1.3 M | 1.2 M | |
| Long Term Debt | 158.9 K | 141.3 K | |
| Long Term Debt Total | 158.9 K | 141.3 K | |
| Net Debt To EBITDA | 0.30 | 0.28 | |
| Debt To Equity | 0.02 | 0.02 | |
| Interest Debt Per Share | 0.03 | 0.03 | |
| Debt To Assets | 0.01 | 0.01 | |
| Total Debt To Capitalization | 0.02 | 0.02 | |
| Debt Equity Ratio | 0.02 | 0.02 | |
| Debt Ratio | 0.01 | 0.01 | |
| Cash Flow To Debt Ratio | (352.75) | (370.38) |
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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.When determining whether Hepion Pharmaceuticals offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Hepion Pharmaceuticals' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Hepion Pharmaceuticals Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Hepion Pharmaceuticals Stock:Check out the analysis of Hepion Pharmaceuticals Fundamentals Over Time. For information on how to trade Hepion Stock refer to our How to Trade Hepion Stock guide.You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Is Pharmaceuticals 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 Hepion Pharmaceuticals. If investors know Hepion 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 Hepion Pharmaceuticals listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (4.40) | Return On Assets (0.93) | Return On Equity (1.90) |
The market value of Hepion Pharmaceuticals is measured differently than its book value, which is the value of Hepion that is recorded on the company's balance sheet. Investors also form their own opinion of Hepion Pharmaceuticals' value that differs from its market value or its book value, called intrinsic value, which is Hepion Pharmaceuticals' 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 Hepion Pharmaceuticals' market value can be influenced by many factors that don't directly affect Hepion Pharmaceuticals' 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 Hepion Pharmaceuticals' value and its price as these two are different measures arrived at by different means. Investors typically determine if Hepion Pharmaceuticals is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Hepion Pharmaceuticals' 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.