International Tower Debt
| THM Stock | USD 0.46 0.01 2.22% |
International Tower Hill holds a debt-to-equity ratio of 0.3. . International Tower's financial risk is the risk to International Tower stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
International Tower'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. International Tower'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 International Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect International Tower's stakeholders.
For most companies, including International Tower, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for International Tower Hill, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, International Tower'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 1.6114 | Book Value 0.292 | Return On Assets (0.04) | Return On Equity (0.06) |
Given that International Tower'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 International Tower 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 International Tower to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, International Tower is said to be less leveraged. If creditors hold a majority of International Tower's assets, the Company is said to be highly leveraged.
International |
International Tower Hill Debt to Cash Allocation
Many companies such as International Tower, 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.
International Tower Hill has 234.95 K in debt with debt to equity (D/E) ratio of 0.3, which may show that the company is not taking advantage of profits from borrowing. International Tower Hill has a current ratio of 38.51, 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 International to invest in growth at high rates of return. International Tower 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 International Tower's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of International Tower, which in turn will lower the firm's financial flexibility.International Tower Corporate Bonds Issued
Understaning International Tower Use of Financial Leverage
Leverage ratios show International Tower's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of International Tower's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
International Tower Hill Mines Ltd., a mineral exploration company, engages in the acquisition, exploration, and development of mineral properties. International Tower Hill Mines Ltd. was incorporated in 1978 and is headquartered in Vancouver, Canada. International Tower operates under Gold classification in the United States and is traded on AMEX Exchange. It employs 3 people. Please read more on our technical analysis page.
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Is 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 International Tower. If investors know International 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 International Tower listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (0.02) | Return On Assets (0.04) | Return On Equity (0.06) |
The market value of International Tower Hill is measured differently than its book value, which is the value of International that is recorded on the company's balance sheet. Investors also form their own opinion of International Tower's value that differs from its market value or its book value, called intrinsic value, which is International Tower'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 International Tower's market value can be influenced by many factors that don't directly affect International Tower'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 International Tower's value and its price as these two are different measures arrived at by different means. Investors typically determine if International Tower is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, International Tower'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.