Triton International Current Debt
| TRTN-PC Preferred Stock | USD 24.91 0.13 0.52% |
Triton International holds a debt-to-equity ratio of 2.57. With a high degree of financial leverage come high-interest payments, which usually reduce Triton International's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Triton International'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. Triton International'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 Triton Preferred Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Triton International's stakeholders.
For most companies, including Triton International, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Triton International Limited, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Triton International's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Triton International'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 Triton International 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 Triton International to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Triton International is said to be less leveraged. If creditors hold a majority of Triton International's assets, the Company is said to be highly leveraged.
Triton |
Triton International Debt to Cash Allocation
Triton International Limited has accumulated 8.55 B in total debt with debt to equity ratio (D/E) of 2.57, implying the company greatly relies on financing operations through barrowing. Triton International has a current ratio of 16.28, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Triton International until it has trouble settling it off, either with new capital or with free cash flow. So, Triton International'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 Triton International sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Triton to invest in growth at high rates of return. When we think about Triton International's use of debt, we should always consider it together with cash and equity.Triton International 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 Triton International's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Triton International, which in turn will lower the firm's financial flexibility.Understaning Triton International Use of Financial Leverage
Triton International's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Triton International's total debt position, including all outstanding debt obligations, and compares it with Triton International's equity. Financial leverage can amplify the potential profits to Triton International's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Triton International is unable to cover its debt costs.
Triton International Limited engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal containers and chassis to shipping lines, and freight forwarding companies and manufacturers. The company was founded in 1980 and is based in Hamilton, Bermuda. Triton International operates under Rental Leasing Services classification in the United States and is traded on NYQ Exchange. It employs 237 people. Please read more on our technical analysis page.
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.Other Information on Investing in Triton Preferred Stock
Triton International financial ratios help investors to determine whether Triton Preferred 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 Triton with respect to the benefits of owning Triton International 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.