Invesco Quality Municipal Corporate Bonds and Leverage Analysis
| IQI Stock | USD 10.05 0.07 0.70% |
Invesco Quality Municipal holds a debt-to-equity ratio of 0.585. As of now, Invesco Quality's Debt To Assets are decreasing as compared to previous years. The Invesco Quality's current Long Term Debt To Capitalization is estimated to increase to 0.35, while Long Term Debt is projected to decrease to under 386 M. With a high degree of financial leverage come high-interest payments, which usually reduce Invesco Quality's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Invesco Quality'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. Invesco Quality'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 Invesco Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Invesco Quality's stakeholders.
For most companies, including Invesco Quality, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Invesco Quality Municipal, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Invesco Quality'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 0.9001 | Book Value 11.087 | Operating Margin 0.8672 | Profit Margin 1.2822 | Return On Assets 0.0253 |
Invesco |
Given the importance of Invesco Quality's capital structure, the first step in the capital decision process is for the management of Invesco Quality 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 Invesco Quality Municipal to issue bonds at a reasonable cost.
Invesco Quality Bond Ratings
Invesco Quality Municipal financial ratings play a critical role in determining how much Invesco Quality 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 Invesco Quality's borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (2.40) | Unlikely Manipulator | View |
Invesco Quality Municipal Debt to Cash Allocation
As Invesco Quality Municipal follows its natural business cycle, the capital allocation decisions will not magically go away. Invesco Quality'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.
Invesco Quality Municipal has 287.68 M in debt with debt to equity (D/E) ratio of 0.59, which is OK given its current industry classification. Invesco Quality Municipal has a current ratio of 1.35, which is typical for the industry and considered as normal. Note however, debt could still be an excellent tool for Invesco to invest in growth at high rates of return. Invesco Quality Total Assets Over Time
Invesco Quality Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Invesco Quality 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.Invesco Quality Debt Ratio | 34.0 |
Invesco Quality Corporate Bonds Issued
Most Invesco bonds can be classified according to their maturity, which is the date when Invesco Quality Municipal 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.
Invesco Long Term Debt
Long Term Debt |
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Understaning Invesco Quality Use of Financial Leverage
Understanding the composition and structure of Invesco Quality's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Invesco Quality's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 506.2 M | 386 M | |
| Short and Long Term Debt | 56 M | 49.8 M | |
| Short Term Debt | 1.1 M | 1.1 M | |
| Net Debt | 281 M | 190.5 M | |
| Short and Long Term Debt Total | 287.7 M | 296 M | |
| Long Term Debt Total | 396.1 M | 343.3 M | |
| Net Debt To EBITDA | 4.89 | 5.13 | |
| Debt To Equity | 0.49 | 0.53 | |
| Interest Debt Per Share | 5.68 | 4.77 | |
| Debt To Assets | 0.33 | 0.34 | |
| Long Term Debt To Capitalization | 0.33 | 0.35 | |
| Total Debt To Capitalization | 0.33 | 0.35 | |
| Debt Equity Ratio | 0.49 | 0.53 | |
| Debt Ratio | 0.33 | 0.34 | |
| Cash Flow To Debt Ratio | 0.06 | 0.06 |
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When determining whether Invesco Quality Municipal offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Invesco Quality's 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 Invesco Quality Municipal Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Invesco Quality Municipal Stock:Check out the analysis of Invesco Quality Fundamentals Over Time. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Is Asset Management & Custody 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 Invesco Quality. If investors know Invesco 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 Invesco Quality 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 0.967 | Dividend Share 0.529 | Earnings Share 0.99 | Revenue Per Share 0.772 | Quarterly Revenue Growth 0.021 |
The market value of Invesco Quality Municipal is measured differently than its book value, which is the value of Invesco that is recorded on the company's balance sheet. Investors also form their own opinion of Invesco Quality's value that differs from its market value or its book value, called intrinsic value, which is Invesco Quality'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 Invesco Quality's market value can be influenced by many factors that don't directly affect Invesco Quality'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 Invesco Quality's value and its price as these two are different measures arrived at by different means. Investors typically determine if Invesco Quality is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Invesco Quality'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.