Jacobs Solutions Debt
| J Stock | USD 139.82 2.56 1.87% |
Jacobs Solutions holds a debt-to-equity ratio of 0.659. At this time, Jacobs Solutions' Short and Long Term Debt is relatively stable compared to the past year. Net Debt To EBITDA is expected to hike to 2.49 this year, although the value of Cash Flow To Debt Ratio will most likely fall to 0.11. . Jacobs Solutions' financial risk is the risk to Jacobs Solutions stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Jacobs Solutions' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Jacobs Solutions' 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 Jacobs Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Jacobs Solutions' stakeholders.
For most companies, including Jacobs Solutions, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Jacobs Solutions, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Jacobs Solutions' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Total Current Liabilities is expected to hike to about 4.9 B this year. Liabilities And Stockholders Equity is expected to hike to about 14.2 B this yearJacobs |
Jacobs Solutions Bond Ratings
Jacobs Solutions financial ratings play a critical role in determining how much Jacobs Solutions 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 Jacobs Solutions' borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (2.57) | Unlikely Manipulator | View |
Jacobs Solutions Debt to Cash Allocation
Jacobs Solutions has accumulated 2.75 B in total debt with debt to equity ratio (D/E) of 0.66, which looks OK as compared to the sector. Jacobs Solutions has a current ratio of 1.4, which is considered satisfactory as compared to similar companies. Note however, debt could still be an excellent tool for Jacobs to invest in growth at high rates of return.Jacobs Solutions Total Assets Over Time
Jacobs Solutions Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Jacobs Solutions 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.Jacobs Solutions Debt Ratio | 30.0 |
Jacobs Solutions Corporate Bonds Issued
Jacobs Solutions issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Jacobs Solutions uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt.
Jacobs Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning Jacobs Solutions Use of Financial Leverage
Understanding the composition and structure of Jacobs Solutions' 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 Jacobs Solutions' 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 | ||
| Short and Long Term Debt Total | 3.2 B | 3.3 B | |
| Net Debt | 1.8 B | 1.9 B | |
| Short Term Debt | 1.1 B | 1.2 B | |
| Long Term Debt | 1.6 B | 1.3 B | |
| Long Term Debt Total | 3.9 B | 4.1 B | |
| Short and Long Term Debt | 1 B | 1.1 B | |
| Net Debt To EBITDA | 2.37 | 2.49 | |
| Debt To Equity | 0.69 | 0.72 | |
| Interest Debt Per Share | 33.15 | 34.81 | |
| Debt To Assets | 0.28 | 0.30 | |
| Long Term Debt To Capitalization | 0.40 | 0.42 | |
| Total Debt To Capitalization | 0.41 | 0.21 | |
| Debt Equity Ratio | 0.69 | 0.72 | |
| Debt Ratio | 0.28 | 0.30 | |
| Cash Flow To Debt Ratio | 0.11 | 0.11 |
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectCheck out the analysis of Jacobs Solutions Fundamentals Over Time. For more information on how to buy Jacobs Stock please use our How to buy in Jacobs Stock guide.You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Is Construction & Engineering 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 Jacobs Solutions. If investors know Jacobs 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 Jacobs Solutions 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 (0.09) | Earnings Share 4.79 | Revenue Per Share | Quarterly Revenue Growth 0.011 | Return On Assets |
The market value of Jacobs Solutions is measured differently than its book value, which is the value of Jacobs that is recorded on the company's balance sheet. Investors also form their own opinion of Jacobs Solutions' value that differs from its market value or its book value, called intrinsic value, which is Jacobs Solutions' 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 Jacobs Solutions' market value can be influenced by many factors that don't directly affect Jacobs Solutions' 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 Jacobs Solutions' value and its price as these two are different measures arrived at by different means. Investors typically determine if Jacobs Solutions is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Jacobs Solutions' 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.