Helios Fairfax Current Debt
| HFPC-U Stock | USD 2.80 0.10 3.45% |
Helios Fairfax Partners holds a debt-to-equity ratio of 0.178. As of November 29, 2024, Net Debt is expected to decline to about 19.1 M. In addition to that, Long Term Debt is expected to decline to about 25.2 M With a high degree of financial leverage come high-interest payments, which usually reduce Helios Fairfax's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Helios Fairfax'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. Helios Fairfax'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 Helios Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Helios Fairfax's stakeholders.
Helios Fairfax Quarterly Net Debt |
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For most companies, including Helios Fairfax, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Helios Fairfax Partners, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Helios Fairfax'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 0.6858 | Book Value 4.388 | Operating Margin 1.2763 | Return On Assets (0.1) | Return On Equity (0.21) |
Given that Helios Fairfax'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 Helios Fairfax 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 Helios Fairfax to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Helios Fairfax is said to be less leveraged. If creditors hold a majority of Helios Fairfax's assets, the Company is said to be highly leveraged.
As of November 29, 2024, Total Current Liabilities is expected to decline to about 873 K. In addition to that, Non Current Liabilities Total is expected to decline to about 30.1 MHelios |
Helios Fairfax Partners Debt to Cash Allocation
Helios Fairfax Partners has accumulated 98.93 M in total debt with debt to equity ratio (D/E) of 0.18, which may suggest the company is not taking enough advantage from borrowing. Helios Fairfax Partners has a current ratio of 458.97, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Helios Fairfax until it has trouble settling it off, either with new capital or with free cash flow. So, Helios Fairfax'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 Helios Fairfax Partners sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Helios to invest in growth at high rates of return. When we think about Helios Fairfax's use of debt, we should always consider it together with cash and equity.Helios Fairfax Other Current Liab Over Time
Helios Fairfax 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 Helios Fairfax's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Helios Fairfax, which in turn will lower the firm's financial flexibility.Helios Net Debt
Net Debt |
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Understaning Helios Fairfax Use of Financial Leverage
Helios Fairfax's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Helios Fairfax's total debt position, including all outstanding debt obligations, and compares it with Helios Fairfax's equity. Financial leverage can amplify the potential profits to Helios Fairfax's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Helios Fairfax is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | 20.1 M | 19.1 M | |
| Long Term Debt | 26.6 M | 25.2 M |
Pair Trading with Helios Fairfax
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 Helios Fairfax 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 Helios Fairfax will appreciate offsetting losses from the drop in the long position's value.Moving against Helios Stock
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The ability to find closely correlated positions to Helios Fairfax could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Helios Fairfax 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 Helios Fairfax - 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 Helios Fairfax Partners to buy it.
The correlation of Helios Fairfax 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 Helios Fairfax moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Helios Fairfax Partners 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 Helios Fairfax 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.Other Information on Investing in Helios Stock
Helios Fairfax financial ratios help investors to determine whether Helios Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Helios with respect to the benefits of owning Helios Fairfax security.
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.