Ohio Valley Banc AerCap Bond

OVBC Stock  USD 27.75  0.09  0.32%   
Ohio Valley Banc has over 54.3 Million in debt which may indicate that it relies heavily on debt financing. At present, Ohio Valley's Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Interest Debt Per Share is expected to grow to 16.61, whereas Short and Long Term Debt Total is forecasted to decline to about 44.2 M. With a high degree of financial leverage come high-interest payments, which usually reduce Ohio Valley's Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Ohio Valley'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. Ohio Valley'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 Ohio Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Ohio Valley's stakeholders.
For most companies, including Ohio Valley, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Ohio Valley Banc, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Ohio Valley'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
0.862
Book Value
32.297
Operating Margin
0.238
Profit Margin
0.2042
Return On Assets
0.0083
At present, Ohio Valley's Non Current Liabilities Other is projected to increase significantly based on the last few years of reporting.
  
Check out the analysis of Ohio Valley Fundamentals Over Time.
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Given the importance of Ohio Valley's capital structure, the first step in the capital decision process is for the management of Ohio Valley to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Ohio Valley Banc to issue bonds at a reasonable cost.
Popular NameOhio Valley AerCap Global Aviation
SpecializationBanks - Regional
Equity ISIN CodeUS6777191064
Bond Issue ISIN CodeUS00773HAA59
S&P Rating
Others
Maturity Date15th of June 2045
Issuance DateOthers
Coupon6.5 %
View All Ohio Valley Outstanding Bonds

Ohio Valley Banc Outstanding Bond Obligations

Understaning Ohio Valley Use of Financial Leverage

Ohio Valley's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Ohio Valley's total debt position, including all outstanding debt obligations, and compares it with Ohio Valley's equity. Financial leverage can amplify the potential profits to Ohio Valley's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Ohio Valley is unable to cover its debt costs.
Last ReportedProjected for Next Year
Short and Long Term Debt Total54.3 M44.2 M
Net Debt-73.8 M-70.1 M
Short Term DebtM11.1 M
Long Term Debt53.1 M35.4 M
Long Term Debt Total30.4 M39.1 M
Short and Long Term Debt6.6 M6.3 M
Net Debt To EBITDA(4.40)(4.18)
Debt To Equity 0.37  0.35 
Interest Debt Per Share 14.48  16.61 
Debt To Assets 0.04  0.04 
Long Term Debt To Capitalization 0.24  0.43 
Total Debt To Capitalization 0.27  0.45 
Debt Equity Ratio 0.37  0.35 
Debt Ratio 0.04  0.04 
Cash Flow To Debt Ratio 0.39  0.22 
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When determining whether Ohio Valley Banc offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Ohio Valley'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 Ohio Valley Banc Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Ohio Valley Banc Stock:
Check out the analysis of Ohio Valley Fundamentals Over Time.
You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Is Regional 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 Ohio Valley. If investors know Ohio 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 Ohio Valley 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
0.224
Dividend Share
0.88
Earnings Share
2.47
Revenue Per Share
12.065
Quarterly Revenue Growth
0.112
The market value of Ohio Valley Banc is measured differently than its book value, which is the value of Ohio that is recorded on the company's balance sheet. Investors also form their own opinion of Ohio Valley's value that differs from its market value or its book value, called intrinsic value, which is Ohio Valley'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 Ohio Valley's market value can be influenced by many factors that don't directly affect Ohio Valley'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 Ohio Valley's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ohio Valley is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ohio Valley'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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.