LCI Industries Debt
| LCII Stock | USD 145.01 8.74 5.68% |
LCI Industries holds a debt-to-equity ratio of 0.958. As of now, LCI Industries' Long Term Debt is increasing as compared to previous years. The LCI Industries' current Long Term Debt Total is estimated to increase to about 1.3 B, while Short and Long Term Debt is projected to decrease to under 361.7 K. With a high degree of financial leverage come high-interest payments, which usually reduce LCI Industries' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
LCI Industries' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. LCI Industries' 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 LCI Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect LCI Industries' stakeholders.
For most companies, including LCI Industries, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for LCI Industries, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, LCI Industries' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
As of now, LCI Industries' Total Current Liabilities is increasing as compared to previous years. The LCI Industries' current Liabilities And Stockholders Equity is estimated to increase to about 3.5 B, while Non Current Liabilities Other is projected to decrease to under 86.1 M. Check out the analysis of LCI Industries Financial Statements. LCI Industries Bond Ratings
LCI Industries financial ratings play a critical role in determining how much LCI Industries 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 LCI Industries' borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (2.46) | Unlikely Manipulator | View |
LCI Industries Debt to Cash Allocation
As LCI Industries follows its natural business cycle, the capital allocation decisions will not magically go away. LCI Industries' 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.
LCI Industries currently holds 995.85 M in liabilities with Debt to Equity (D/E) ratio of 0.96, which is about average as compared to similar companies. LCI Industries has a current ratio of 2.61, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about LCI Industries' use of debt, we should always consider it together with its cash and equity.LCI Industries Total Assets Over Time
LCI Industries Assets Financed by Debt
The debt-to-assets ratio shows the degree to which LCI Industries 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.LCI Industries Debt Ratio | 29.0 |
LCI Industries Corporate Bonds Issued
Most LCI bonds can be classified according to their maturity, which is the date when LCI Industries 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.
LCI Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning LCI Industries Use of Financial Leverage
Understanding the composition and structure of LCI Industries' 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 LCI Industries' 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 | 1.1 B | 1.2 B | |
| Net Debt | 954.6 M | 1 B | |
| Short Term Debt | 45 M | 47.2 M | |
| Long Term Debt | 870.4 M | 913.9 M | |
| Long Term Debt Total | 1.3 B | 1.3 B | |
| Short and Long Term Debt | 380.7 K | 361.7 K | |
| Net Debt To EBITDA | 2.78 | 1.71 | |
| Debt To Equity | 0.83 | 0.72 | |
| Interest Debt Per Share | 36.24 | 38.06 | |
| Debt To Assets | 0.40 | 0.29 | |
| Long Term Debt To Capitalization | 0.41 | 0.33 | |
| Total Debt To Capitalization | 0.48 | 0.39 | |
| Debt Equity Ratio | 0.83 | 0.72 | |
| Debt Ratio | 0.40 | 0.29 | |
| Cash Flow To Debt Ratio | 0.33 | 0.32 |
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Check out the analysis of LCI Industries Financial Statements. For more detail on how to invest in LCI Stock please use our How to Invest in LCI Industries guide.You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Is there potential for Automotive Parts & Equipment market expansion? Will LCI introduce new products? Factors like these will boost the valuation of LCI Industries. Expected growth trajectory for LCI significantly influences the price investors are willing to assign. Understanding fair value requires weighing current performance against future potential. All the valuation information about LCI Industries 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 0.835 | Dividend Share 4.6 | Earnings Share 7.15 | Revenue Per Share | Quarterly Revenue Growth 0.132 |
LCI Industries's market price often diverges from its book value, the accounting figure shown on LCI's balance sheet. Smart investors calculate LCI Industries' intrinsic value - its true economic worth - which may differ significantly from both market price and book value. Analysts utilize numerous techniques to assess fundamental value, seeking to purchase shares when trading prices fall beneath estimated intrinsic worth. Since LCI Industries' trading price responds to investor sentiment, macroeconomic conditions, and market psychology, it can swing far from fundamental value.
Understanding that LCI Industries' value differs from its trading price is crucial, as each reflects different aspects of the company. Evaluating whether LCI Industries represents a sound investment requires analyzing earnings trends, revenue growth, technical signals, industry dynamics, and expert forecasts. However, LCI Industries' 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.