LyondellBasell Industries Debt
| LYB Stock | USD 77.75 0.76 0.99% |
LyondellBasell Industries holds a debt-to-equity ratio of 1.061. At present, LyondellBasell Industries' Short Term Debt is projected to decrease significantly based on the last few years of reporting. The current year's Net Debt To EBITDA is expected to grow to 1.96, whereas Short and Long Term Debt Total is forecasted to decline to about 11.3 B. With a high degree of financial leverage come high-interest payments, which usually reduce LyondellBasell Industries' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
LyondellBasell 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. LyondellBasell 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 LyondellBasell Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect LyondellBasell Industries' stakeholders.
LyondellBasell Industries Quarterly Net Debt |
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For most companies, including LyondellBasell Industries, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for LyondellBasell Industries NV, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, LyondellBasell Industries' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that LyondellBasell Industries' 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 LyondellBasell Industries 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 LyondellBasell Industries to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, LyondellBasell Industries is said to be less leveraged. If creditors hold a majority of LyondellBasell Industries' assets, the Company is said to be highly leveraged.
As of February 7, 2025, Total Current Liabilities is expected to decline to about 5.8 B. In addition to that, Liabilities And Stockholders Equity is expected to decline to about 31.4 BLyondellBasell |
LyondellBasell Industries Debt to Cash Allocation
As LyondellBasell Industries NV follows its natural business cycle, the capital allocation decisions will not magically go away. LyondellBasell 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.
LyondellBasell Industries NV has 13 B in debt with debt to equity (D/E) ratio of 1.06, which is OK given its current industry classification. LyondellBasell Industries has a current ratio of 1.59, which is typical for the industry and considered as normal. Note however, debt could still be an excellent tool for LyondellBasell to invest in growth at high rates of return. LyondellBasell Industries Common Stock Shares Outstanding Over Time
LyondellBasell Industries Assets Financed by Debt
The debt-to-assets ratio shows the degree to which LyondellBasell 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.LyondellBasell Industries Debt Ratio | 28.0 |
LyondellBasell Industries Corporate Bonds Issued
Most LyondellBasell bonds can be classified according to their maturity, which is the date when LyondellBasell Industries NV 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.
LyondellBasell Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning LyondellBasell Industries Use of Financial Leverage
LyondellBasell Industries' financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures LyondellBasell Industries' total debt position, including all outstanding debt obligations, and compares it with LyondellBasell Industries' equity. Financial leverage can amplify the potential profits to LyondellBasell Industries' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if LyondellBasell Industries is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 15 B | 11.3 B | |
| Net Debt | 11.1 B | 9.4 B | |
| Long Term Debt | 11.9 B | 8.2 B | |
| Short Term Debt | 1.1 B | 1.9 B | |
| Long Term Debt Total | 12.1 B | 9.4 B | |
| Short and Long Term Debt | 809.1 M | 768.4 M | |
| Net Debt To EBITDA | 1.87 | 1.96 | |
| Debt To Equity | 0.90 | 0.48 | |
| Interest Debt Per Share | 37.32 | 21.35 | |
| Debt To Assets | 0.32 | 0.28 | |
| Long Term Debt To Capitalization | 0.40 | 0.31 | |
| Total Debt To Capitalization | 0.45 | 0.47 | |
| Debt Equity Ratio | 0.90 | 0.48 | |
| Debt Ratio | 0.32 | 0.28 | |
| Cash Flow To Debt Ratio | 0.34 | 0.42 |
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether LyondellBasell Industries offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of LyondellBasell Industries' 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 Lyondellbasell Industries Nv Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Lyondellbasell Industries Nv Stock:Check out the analysis of LyondellBasell Industries Fundamentals Over Time. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Is Commodity Chemicals 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 LyondellBasell Industries. If investors know LyondellBasell 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 LyondellBasell 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 (0.24) | Dividend Share 5.18 | Earnings Share 6.59 | Revenue Per Share | Quarterly Revenue Growth (0.03) |
The market value of LyondellBasell Industries is measured differently than its book value, which is the value of LyondellBasell that is recorded on the company's balance sheet. Investors also form their own opinion of LyondellBasell Industries' value that differs from its market value or its book value, called intrinsic value, which is LyondellBasell Industries' 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 LyondellBasell Industries' market value can be influenced by many factors that don't directly affect LyondellBasell Industries' 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 LyondellBasell Industries' value and its price as these two are different measures arrived at by different means. Investors typically determine if LyondellBasell Industries is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, LyondellBasell 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.