TGS Dis Debt
| TGSAS Stock | TRY 57.40 0.60 1.06% |
TGS Dis Ticaret has over 2.93 Million 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 TGS Dis' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
TGS Dis' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. TGS Dis' 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 TGS Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect TGS Dis' stakeholders.
For most companies, including TGS Dis, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for TGS Dis Ticaret, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, TGS Dis' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that TGS Dis' 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 TGS Dis 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 TGS Dis to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, TGS Dis is said to be less leveraged. If creditors hold a majority of TGS Dis' assets, the Company is said to be highly leveraged.
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TGS Dis Ticaret Debt to Cash Allocation
TGS Dis Ticaret has accumulated 2.93 M in total debt with debt to equity ratio (D/E) of 6.8, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. TGS Dis Ticaret has a current ratio of 1.0, suggesting that it may have difficulties to pay its financial obligations in time and when they become due. Debt can assist TGS Dis until it has trouble settling it off, either with new capital or with free cash flow. So, TGS Dis' 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 TGS Dis Ticaret sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for TGS to invest in growth at high rates of return. When we think about TGS Dis' use of debt, we should always consider it together with cash and equity.TGS Dis 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 TGS Dis' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of TGS Dis, which in turn will lower the firm's financial flexibility.TGS Dis Corporate Bonds Issued
Most TGS bonds can be classified according to their maturity, which is the date when TGS Dis Ticaret 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 TGS Dis Use of Financial Leverage
Understanding the composition and structure of TGS Dis' 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 TGS Dis' 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).
TGS Dis Ticaret Anonim Sirketi provides brokering services for export activities of manufacturing and trade companies operating in Turkey. TGS Dis Ticaret Anonim Sirketi was founded in 1999 and is based in Istanbul, Turkey. TGS DIS is traded on Istanbul Stock Exchange in Turkey. Please read more on our technical analysis page.
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TGS Dis financial ratios help investors to determine whether TGS Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in TGS with respect to the benefits of owning TGS Dis security.
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.