Tanzanian Royalty Current Debt
| TRX Stock | USD 0.35 0.01 2.78% |
Tanzanian Royalty holds a debt-to-equity ratio of 0.235. At this time, Tanzanian Royalty's Short and Long Term Debt is fairly stable compared to the past year. Debt To Equity is likely to rise to 0.19 in 2024, despite the fact that Net Debt is likely to grow to (6.4 M). With a high degree of financial leverage come high-interest payments, which usually reduce Tanzanian Royalty's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Tanzanian Royalty'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. Tanzanian Royalty'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 Tanzanian Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Tanzanian Royalty's stakeholders.
For most companies, including Tanzanian Royalty, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Tanzanian Royalty Exploration, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Tanzanian Royalty'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 1.8907 | Book Value 0.194 | Operating Margin 0.2356 | Profit Margin (0.03) | Return On Assets 0.0612 |
Given that Tanzanian Royalty'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 Tanzanian Royalty 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 Tanzanian Royalty to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Tanzanian Royalty is said to be less leveraged. If creditors hold a majority of Tanzanian Royalty's assets, the Company is said to be highly leveraged.
Total Current Liabilities is likely to rise to about 21.5 M in 2024. Liabilities And Stockholders Equity is likely to rise to about 101.7 M in 2024Tanzanian |
Tanzanian Royalty Debt to Cash Allocation
As Tanzanian Royalty Exploration follows its natural business cycle, the capital allocation decisions will not magically go away. Tanzanian Royalty's 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.
Tanzanian Royalty Exploration has 101 K in debt with debt to equity (D/E) ratio of 0.24, which may show that the company is not taking advantage of profits from borrowing. Tanzanian Royalty has a current ratio of 1.42, which is typical for the industry and considered as normal. Note however, debt could still be an excellent tool for Tanzanian to invest in growth at high rates of return. Tanzanian Royalty Total Assets Over Time
Tanzanian Royalty Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Tanzanian Royalty uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Tanzanian Royalty Debt Ratio | 13.0 |
Tanzanian Net Debt
Understaning Tanzanian Royalty Use of Financial Leverage
Understanding the structure of Tanzanian Royalty's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Tanzanian Royalty's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
| Last Reported | Projected for Next Year | ||
| Net Debt | -6.8 M | -6.4 M | |
| Short and Long Term Debt | 7.6 M | 8 M | |
| Short Term Debt | 74.8 K | 71 K | |
| Short and Long Term Debt Total | 116.2 K | 110.3 K | |
| Net Debt To EBITDA | (0.56) | (0.59) | |
| Debt To Equity | 0.18 | 0.19 | |
| Interest Debt Per Share | 0.01 | 0.01 | |
| Debt To Assets | 0.12 | 0.13 | |
| Long Term Debt To Capitalization | 0.03 | 0.02 | |
| Total Debt To Capitalization | 0.15 | 0.16 | |
| Debt Equity Ratio | 0.18 | 0.19 | |
| Debt Ratio | 0.12 | 0.13 | |
| Cash Flow To Debt Ratio | (1.14) | (1.20) |
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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.Additional Tools for Tanzanian Stock Analysis
When running Tanzanian Royalty's price analysis, check to measure Tanzanian Royalty's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Tanzanian Royalty is operating at the current time. Most of Tanzanian Royalty's value examination focuses on studying past and present price action to predict the probability of Tanzanian Royalty's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Tanzanian Royalty's price. Additionally, you may evaluate how the addition of Tanzanian Royalty to your portfolios can decrease your overall portfolio volatility.
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.