Okta Debt
| OKTA Stock | USD 75.44 1.75 2.37% |
Okta Inc holds a debt-to-equity ratio of 0.437. At present, Okta's Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Debt To Assets is expected to grow to 0.22, whereas Net Debt is forecasted to decline to about 723.6 M. With a high degree of financial leverage come high-interest payments, which usually reduce Okta's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Okta'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. Okta'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 Okta Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Okta's stakeholders.
For most companies, including Okta, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Okta Inc, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Okta'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 2.0409 | Book Value 36.109 | Operating Margin (0.03) | Profit Margin (0.06) | Return On Assets (0.02) |
Okta |
Okta Bond Ratings
Okta Inc financial ratings play a critical role in determining how much Okta 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 Okta's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (2.85) | Unlikely Manipulator | View |
Okta Inc Debt to Cash Allocation
As Okta Inc follows its natural business cycle, the capital allocation decisions will not magically go away. Okta'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.
Okta Inc currently holds 1.27 B in liabilities with Debt to Equity (D/E) ratio of 0.44, which is about average as compared to similar companies. Okta Inc has a current ratio of 2.33, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Okta's use of debt, we should always consider it together with its cash and equity.Okta Total Assets Over Time
Okta Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Okta 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.Okta Debt Ratio | 22.0 |
Okta Corporate Bonds Issued
Most Okta bonds can be classified according to their maturity, which is the date when Okta Inc 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.
Okta Net Debt
Net Debt |
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Understaning Okta Use of Financial Leverage
Okta's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Okta's total debt position, including all outstanding debt obligations, and compares it with Okta's equity. Financial leverage can amplify the potential profits to Okta's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Okta is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | 932 M | 723.6 M | |
| Short Term Debt | 31 M | 29.4 M | |
| Long Term Debt | 1.2 B | 942.9 M | |
| Short and Long Term Debt | 18.6 M | 17.7 M | |
| Short and Long Term Debt Total | 1.3 B | 1.6 B | |
| Long Term Debt Total | 2.5 B | 1.6 B | |
| Net Debt To EBITDA | (4.05) | (4.25) | |
| Debt To Equity | 0.22 | 0.20 | |
| Interest Debt Per Share | 7.79 | 6.97 | |
| Debt To Assets | 0.14 | 0.22 | |
| Long Term Debt To Capitalization | 0.18 | 0.35 | |
| Total Debt To Capitalization | 0.18 | 0.17 | |
| Debt Equity Ratio | 0.22 | 0.20 | |
| Debt Ratio | 0.14 | 0.22 | |
| Cash Flow To Debt Ratio | 0.40 | 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 Okta Inc offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Okta'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 Okta Inc Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Okta Inc Stock:Check out the analysis of Okta Fundamentals Over Time. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Is Internet Services & Infrastructure 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 Okta. If investors know Okta 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 Okta listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (0.81) | Revenue Per Share 14.715 | Quarterly Revenue Growth 0.162 | Return On Assets (0.02) | Return On Equity (0.02) |
The market value of Okta Inc is measured differently than its book value, which is the value of Okta that is recorded on the company's balance sheet. Investors also form their own opinion of Okta's value that differs from its market value or its book value, called intrinsic value, which is Okta'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 Okta's market value can be influenced by many factors that don't directly affect Okta'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 Okta's value and its price as these two are different measures arrived at by different means. Investors typically determine if Okta is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Okta'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.