Standard Lithium Debt
| SLI Stock | USD 1.66 0.04 2.35% |
Standard Lithium holds a debt-to-equity ratio of 0.002. As of now, Standard Lithium's Debt Equity Ratio is increasing as compared to previous years. With a high degree of financial leverage come high-interest payments, which usually reduce Standard Lithium's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Standard Lithium'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. Standard Lithium'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 Standard Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Standard Lithium's stakeholders.
For most companies, including Standard Lithium, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Standard Lithium, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Standard Lithium'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 1.2628 | Book Value 1.847 | Return On Assets (0.10) | Return On Equity 0.5908 |
Given that Standard Lithium's 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 Standard Lithium 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 Standard Lithium to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Standard Lithium is said to be less leveraged. If creditors hold a majority of Standard Lithium's assets, the Company is said to be highly leveraged.
The Standard Lithium's current Total Current Liabilities is estimated to increase to about 18.1 M. The Standard Lithium's current Liabilities And Stockholders Equity is estimated to increase to about 412.6 MStandard |
Standard Lithium Bond Ratings
Standard Lithium financial ratings play a critical role in determining how much Standard Lithium 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 Standard Lithium's borrowing costs.| Piotroski F Score | 2 | Frail | View |
| Beneish M Score | (4.57) | Unlikely Manipulator | View |
Standard Lithium Debt to Cash Allocation
As Standard Lithium follows its natural business cycle, the capital allocation decisions will not magically go away. Standard Lithium'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.
Standard Lithium has 989 K in debt with debt to equity (D/E) ratio of 0.0, which may show that the company is not taking advantage of profits from borrowing. Standard Lithium has a current ratio of 19.05, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Standard to invest in growth at high rates of return. Standard Lithium Total Assets Over Time
Standard Lithium Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Standard Lithium 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.Standard Lithium Debt Ratio | 16.0 |
Standard Lithium Corporate Bonds Issued
Most Standard bonds can be classified according to their maturity, which is the date when Standard Lithium 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.
Standard Net Debt
Net Debt |
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Understaning Standard Lithium Use of Financial Leverage
Understanding the composition and structure of Standard Lithium's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Standard Lithium's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Net Debt | -51.9 M | -49.3 M | |
| Short and Long Term Debt Total | 989 K | 939.5 K | |
| Short Term Debt | 521 K | 299.5 K | |
| Long Term Debt | 5.7 M | 6 M | |
| Long Term Debt Total | 5.7 M | 2.9 M | |
| Net Debt To EBITDA | 0.84 | (0.64) | |
| Debt To Equity | 0.17 | 0.18 | |
| Debt To Assets | 0.17 | 0.16 | |
| Long Term Debt To Capitalization | 0.18 | 0.10 | |
| Total Debt To Capitalization | 0.14 | 0.15 | |
| Debt Equity Ratio | 0.17 | 0.18 | |
| Debt Ratio | 0.17 | 0.16 | |
| Cash Flow To Debt Ratio | (0.31) | (0.33) |
Currently Active Assets on Macroaxis
When determining whether Standard Lithium offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Standard Lithium'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 Standard Lithium Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Standard Lithium Stock:Check out the analysis of Standard Lithium Fundamentals Over Time. For more detail on how to invest in Standard Stock please use our How to Invest in Standard Lithium guide.You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Is Diversified Metals & Mining 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 Standard Lithium. If investors know Standard 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 Standard Lithium listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share 0.61 | Return On Assets (0.10) | Return On Equity 0.5908 |
The market value of Standard Lithium is measured differently than its book value, which is the value of Standard that is recorded on the company's balance sheet. Investors also form their own opinion of Standard Lithium's value that differs from its market value or its book value, called intrinsic value, which is Standard Lithium'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 Standard Lithium's market value can be influenced by many factors that don't directly affect Standard Lithium'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 Standard Lithium's value and its price as these two are different measures arrived at by different means. Investors typically determine if Standard Lithium is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Standard Lithium'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.