JPMorgan Chase Debt
| JPM Stock | USD 248.55 3.79 1.55% |
JPMorgan Chase has over 436.54 Billion in debt which may indicate that it relies heavily on debt financing. At this time, JPMorgan Chase's Debt Ratio is very stable compared to the past year. . JPMorgan Chase's financial risk is the risk to JPMorgan Chase stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
JPMorgan Chase'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. JPMorgan Chase'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 JPMorgan Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect JPMorgan Chase's stakeholders.
For most companies, including JPMorgan Chase, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for JPMorgan Chase Co, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, JPMorgan Chase'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 2.1585 | Book Value 115.15 | Operating Margin 0.4379 | Profit Margin 0.3316 | Return On Assets 0.0133 |
JPMorgan |
JPMorgan Chase Bond Ratings
JPMorgan Chase Co financial ratings play a critical role in determining how much JPMorgan Chase 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 JPMorgan Chase's borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (2.63) | Unlikely Manipulator | View |
JPMorgan Chase Debt to Cash Allocation
Many companies such as JPMorgan Chase, 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.
JPMorgan Chase Co has 436.54 B in debt with debt to equity (D/E) ratio of 8.5, demonstrating that the company may be unable to create cash to meet all of its financial commitments. Note however, debt could still be an excellent tool for JPMorgan to invest in growth at high rates of return. JPMorgan Chase Common Stock Shares Outstanding Over Time
JPMorgan Chase Assets Financed by Debt
The debt-to-assets ratio shows the degree to which JPMorgan Chase 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.JPMorgan Chase Debt Ratio | 14.0 |
JPMorgan Chase Corporate Bonds Issued
JPMorgan Chase 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. JPMorgan Chase 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.
JPMorgan Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning JPMorgan Chase Use of Financial Leverage
Leverage ratios show JPMorgan Chase's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of JPMorgan Chase's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 436.5 B | 269.6 B | |
| Net Debt | -187.6 B | -178.2 B | |
| Short Term Debt | 44.7 B | 33.9 B | |
| Long Term Debt | 391.8 B | 232 B | |
| Long Term Debt Total | 171.5 B | 217 B | |
| Short and Long Term Debt | 44.7 B | 42.5 B | |
| Net Debt To EBITDA | (2.40) | (2.28) | |
| Debt To Equity | 1.33 | 1.89 | |
| Interest Debt Per Share | 176.23 | 185.04 | |
| Debt To Assets | 0.11 | 0.14 | |
| Long Term Debt To Capitalization | 0.54 | 0.42 | |
| Total Debt To Capitalization | 0.57 | 0.68 | |
| Debt Equity Ratio | 1.33 | 1.89 | |
| Debt Ratio | 0.11 | 0.14 | |
| Cash Flow To Debt Ratio | 0.03 | 0.02 |
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 JPMorgan Chase Fundamentals Over Time. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Is Diversified 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 JPMorgan Chase. If investors know JPMorgan 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 JPMorgan Chase 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 0.009 | Dividend Share 4.6 | Earnings Share 18 | Revenue Per Share 56.043 | Quarterly Revenue Growth 0.03 |
The market value of JPMorgan Chase is measured differently than its book value, which is the value of JPMorgan that is recorded on the company's balance sheet. Investors also form their own opinion of JPMorgan Chase's value that differs from its market value or its book value, called intrinsic value, which is JPMorgan Chase'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 JPMorgan Chase's market value can be influenced by many factors that don't directly affect JPMorgan Chase'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 JPMorgan Chase's value and its price as these two are different measures arrived at by different means. Investors typically determine if JPMorgan Chase is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, JPMorgan Chase'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.