Profound Medical Debt
| PROF Stock | USD 7.58 0.18 2.32% |
Profound Medical Corp holds a debt-to-equity ratio of 0.018. At this time, Profound Medical's Short and Long Term Debt is most likely to increase significantly in the upcoming years. Profound Medical's financial risk is the risk to Profound Medical stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Profound Medical'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. Profound Medical'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 Profound Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Profound Medical's stakeholders.
For most companies, including Profound Medical, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Profound Medical Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Profound Medical's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
The Profound Medical's current Non Current Liabilities Total is estimated to increase to about 5.1 M, while Total Current Liabilities is projected to decrease to roughly 5.3 M. Check out the analysis of Profound Medical Fundamentals Over Time. Profound Medical Bond Ratings
Profound Medical Corp financial ratings play a critical role in determining how much Profound Medical 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 Profound Medical's borrowing costs.| Piotroski F Score | 1 | Very Weak | View |
| Beneish M Score | (8.20) | Unlikely Manipulator | View |
Profound Medical Corp Debt to Cash Allocation
Mature firms like Profound Medical reach inflection points where market saturation limits expansion. Incremental ventures yield diminishing marginal returns compared to core operations. When robust cash flows accumulate beyond reinvestment needs, capital repatriation via stock repurchases or dividends becomes attractive.
Profound Medical Corp currently holds 5.12 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the company is not taking enough advantage from borrowing. Profound Medical Corp has a current ratio of 17.01, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Profound Medical's use of debt, we should always consider it together with its cash and equity.Profound Medical Total Assets Over Time
Profound Medical Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Profound Medical 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.Profound Medical Debt Ratio | 7.97 |
Profound Medical Corporate Bonds Issued
Most Profound bonds can be classified according to their maturity, which is the date when Profound Medical Corp 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.
Profound Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Profound Medical Use of Financial Leverage
Profound Medical's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Profound Medical's total debt position, including all outstanding debt obligations, and compares it with Profound Medical's equity. Financial leverage can amplify the potential profits to Profound Medical's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Profound Medical is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 5.9 M | 6.7 M | |
| Net Debt | -44.8 M | -42.6 M | |
| Short Term Debt | 2.3 M | 1.8 M | |
| Long Term Debt | 3.4 M | 5.7 M | |
| Long Term Debt Total | 10.2 M | 6.4 M | |
| Short and Long Term Debt | 1.6 M | 1.9 M | |
| Net Debt To EBITDA | 1.39 | 0.89 | |
| Debt To Equity | 0.10 | 0.09 | |
| Interest Debt Per Share | 0.24 | 0.23 | |
| Debt To Assets | 0.08 | 0.08 | |
| Long Term Debt To Capitalization | 0.05 | 0.05 | |
| Total Debt To Capitalization | 0.09 | 0.09 | |
| Debt Equity Ratio | 0.10 | 0.09 | |
| Debt Ratio | 0.08 | 0.08 | |
| Cash Flow To Debt Ratio | (5.27) | (5.53) |
Currently Active Assets on Macroaxis
When determining whether Profound Medical Corp is a strong investment it is important to analyze Profound Medical's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Profound Medical's future performance. For an informed investment choice regarding Profound Stock, refer to the following important reports:Check out the analysis of Profound Medical Fundamentals Over Time. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Can Health Care Equipment & Supplies industry sustain growth momentum? Does Profound have expansion opportunities? Factors like these will boost the valuation of Profound Medical. Anticipated expansion of Profound directly elevates investor willingness to pay premium valuations. Determining accurate worth demands scrutiny of both present operating results and projected expansion capacity. Evaluating Profound Medical demands reviewing these metrics collectively while recognizing certain factors exert disproportionate influence.
Earnings Share (1.32) | Revenue Per Share | Quarterly Revenue Growth 0.868 | Return On Assets | Return On Equity |
Investors evaluate Profound Medical Corp using market value (trading price) and book value (balance sheet equity), each telling a different story. Calculating Profound Medical's intrinsic value—the estimated true worth—helps identify when the stock trades at a discount or premium to fair value. Market participants employ diverse analytical approaches to determine fair value and identify buying opportunities when prices dip below calculated worth. External factors like market trends, sector rotation, and investor psychology can cause Profound Medical's market price to deviate significantly from intrinsic value.
It's important to distinguish between Profound Medical's intrinsic value and market price, which are calculated using different methodologies. Investment decisions regarding Profound Medical should consider multiple factors including financial performance, growth metrics, competitive position, and professional analysis. Conversely, Profound Medical's market price signifies the transaction level at which participants voluntarily complete trades.
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.