PGIM Ultra Debt
| PULS Etf | USD 49.73 0.03 0.06% |
PGIM Ultra Short has over 127.05 Million in debt which may indicate that it relies heavily on debt financing. . PGIM Ultra's financial risk is the risk to PGIM Ultra stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
PGIM Ultra'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. PGIM Ultra's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the ETF is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps PGIM Etf's retail investors understand whether an upcoming fall or rise in the market will negatively affect PGIM Ultra's stakeholders.
For most companies, including PGIM Ultra, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for PGIM Ultra Short, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, PGIM Ultra's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Total Assets 8.8 B |
Given that PGIM Ultra's debt-to-equity ratio measures a ETF's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which PGIM Ultra 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 PGIM Ultra to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, PGIM Ultra is said to be less leveraged. If creditors hold a majority of PGIM Ultra's assets, the ETF is said to be highly leveraged.
PGIM |
PGIM Ultra Short Debt to Cash Allocation
Many companies such as PGIM Ultra, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
PGIM Ultra Short currently holds 127.05 M in liabilities with Debt to Equity (D/E) ratio of 9.77, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. PGIM Ultra Short has a current ratio of 1.28, suggesting that it may have difficulties to pay its financial obligations when due. Debt can assist PGIM Ultra until it has trouble settling it off, either with new capital or with free cash flow. So, PGIM Ultra's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like PGIM Ultra Short sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for PGIM to invest in growth at high rates of return. When we think about PGIM Ultra's use of debt, we should always consider it together with cash and equity.PGIM Ultra Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the PGIM Ultra's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of PGIM Ultra, which in turn will lower the firm's financial flexibility.PGIM Ultra Corporate Bonds Issued
Understaning PGIM Ultra Use of Financial Leverage
PGIM Ultra's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to PGIM Ultra's current equity. If creditors own a majority of PGIM Ultra's assets, the company is considered highly leveraged. Understanding the composition and structure of PGIM Ultra's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
The fund invests primarily in a portfolio of investment grade, U.S. dollar denominated short-term fixed, variable and floating rate debt instruments. PGIM Ultra is traded on NYSEARCA Exchange in the United States. Please read more on our technical analysis page.
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Check out the analysis of PGIM Ultra Fundamentals Over Time. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
The market value of PGIM Ultra Short is measured differently than its book value, which is the value of PGIM that is recorded on the company's balance sheet. Investors also form their own opinion of PGIM Ultra's value that differs from its market value or its book value, called intrinsic value, which is PGIM Ultra'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 PGIM Ultra's market value can be influenced by many factors that don't directly affect PGIM Ultra'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 PGIM Ultra's value and its price as these two are different measures arrived at by different means. Investors typically determine if PGIM Ultra is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, PGIM Ultra'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.