Thermogenesis Holdings Corporate Bonds and Leverage Analysis
| THMODelisted Stock | USD 0.32 0.01 3.03% |
Thermogenesis Holdings holds a debt-to-equity ratio of 2.427. With a high degree of financial leverage come high-interest payments, which usually reduce Thermogenesis Holdings' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Thermogenesis Holdings' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Thermogenesis Holdings' 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 Thermogenesis Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Thermogenesis Holdings' stakeholders.
For most companies, including Thermogenesis Holdings, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Thermogenesis Holdings, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Thermogenesis Holdings' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Thermogenesis |
Given the importance of Thermogenesis Holdings' capital structure, the first step in the capital decision process is for the management of Thermogenesis Holdings to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Thermogenesis Holdings to issue bonds at a reasonable cost.
Thermogenesis Holdings Debt to Cash Allocation
As Thermogenesis Holdings follows its natural business cycle, the capital allocation decisions will not magically go away. Thermogenesis Holdings' 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.
Thermogenesis Holdings currently holds 10.56 M in liabilities with Debt to Equity (D/E) ratio of 2.43, implying the company greatly relies on financing operations through barrowing. Thermogenesis Holdings has a current ratio of 1.03, suggesting that it may have difficulties to pay its financial obligations when due. Note, when we think about Thermogenesis Holdings' use of debt, we should always consider it together with its cash and equity.Thermogenesis Holdings 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 Thermogenesis Holdings' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Thermogenesis Holdings, which in turn will lower the firm's financial flexibility.Thermogenesis Holdings Corporate Bonds Issued
Understaning Thermogenesis Holdings Use of Financial Leverage
Leverage ratios show Thermogenesis Holdings' 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 Thermogenesis Holdings' 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).
ThermoGenesis Holdings, Inc. develops, commercializes, and markets a range of automated technologies for chimeric antigen receptor and other cell-based therapies. ThermoGenesis Holdings, Inc. was incorporated in 1986 and is headquartered in Rancho Cordova, California. Thermogenesis Holdings operates under Medical Devices classification in the United States and is traded on NASDAQ Exchange. It employs people. Please read more on our technical analysis page.
Pair Trading with Thermogenesis Holdings
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Thermogenesis Holdings position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thermogenesis Holdings will appreciate offsetting losses from the drop in the long position's value.Moving together with Thermogenesis Stock
Moving against Thermogenesis Stock
| 0.82 | VREX | Varex Imaging Corp | PairCorr |
| 0.79 | PEN | Penumbra | PairCorr |
| 0.78 | NXL | Nexalin Technology | PairCorr |
| 0.78 | GMED | Globus Medical | PairCorr |
| 0.76 | GKOS | Glaukos Corp | PairCorr |
The ability to find closely correlated positions to Thermogenesis Holdings could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Thermogenesis Holdings when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Thermogenesis Holdings - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Thermogenesis Holdings to buy it.
The correlation of Thermogenesis Holdings is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Thermogenesis Holdings moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Thermogenesis Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Thermogenesis Holdings can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out World Market Map to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in population. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Consideration for investing in Thermogenesis Stock
If you are still planning to invest in Thermogenesis Holdings check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Thermogenesis Holdings' history and understand the potential risks before investing.
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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.