Touchstone Dynamic Debt
| TDI Etf | USD 29.23 0.14 0.48% |
Touchstone Dynamic has over 2.45 Billion in debt which may indicate that it relies heavily on debt financing. With a high degree of financial leverage come high-interest payments, which usually reduce Touchstone Dynamic's Earnings Per Share (EPS).
Given that Touchstone Dynamic'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 Touchstone Dynamic 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 Touchstone Dynamic to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Touchstone Dynamic is said to be less leveraged. If creditors hold a majority of Touchstone Dynamic's assets, the ETF is said to be highly leveraged.
Touchstone |
Touchstone Dynamic Debt to Cash Allocation
Touchstone Dynamic International has 2.45 B in debt with debt to equity (D/E) ratio of 47.5, demonstrating that the company may be unable to create cash to meet all of its financial commitments. Touchstone Dynamic has a current ratio of 2.67, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Debt can assist Touchstone Dynamic until it has trouble settling it off, either with new capital or with free cash flow. So, Touchstone Dynamic'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 Touchstone Dynamic sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Touchstone to invest in growth at high rates of return. When we think about Touchstone Dynamic's use of debt, we should always consider it together with cash and equity.Touchstone Dynamic 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 Touchstone Dynamic's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Touchstone Dynamic, which in turn will lower the firm's financial flexibility.Touchstone Dynamic Corporate Bonds Issued
Most Touchstone bonds can be classified according to their maturity, which is the date when Touchstone Dynamic International 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.
Understaning Touchstone Dynamic Use of Financial Leverage
Understanding the composition and structure of Touchstone Dynamic'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 Touchstone Dynamic'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).
Telephone and Data Systems, Inc., a telecommunications company, provides wireless, wireline, cable, and hosted and managed services in the United States. The company was founded in 1968 and is headquartered in Chicago, Illinois. Telephone is traded on New York Stock Exchange in USA. Please read more on our technical analysis page.
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When determining whether Touchstone Dynamic offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Touchstone Dynamic'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 Touchstone Dynamic International Etf. Outlined below are crucial reports that will aid in making a well-informed decision on Touchstone Dynamic International Etf:Check out the analysis of Touchstone Dynamic Fundamentals Over Time. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
The market value of Touchstone Dynamic is measured differently than its book value, which is the value of Touchstone that is recorded on the company's balance sheet. Investors also form their own opinion of Touchstone Dynamic's value that differs from its market value or its book value, called intrinsic value, which is Touchstone Dynamic'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 Touchstone Dynamic's market value can be influenced by many factors that don't directly affect Touchstone Dynamic'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 Touchstone Dynamic's value and its price as these two are different measures arrived at by different means. Investors typically determine if Touchstone Dynamic is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Touchstone Dynamic'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.