Vince Holding Corp Corporate Bonds and Leverage Analysis
| VNCE Stock | USD 1.64 0.04 2.38% |
Vince Holding Corp has over 128.46 Million in debt which may indicate that it relies heavily on debt financing. At present, Vince Holding's Net Debt is projected to decrease significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 37.6 M, whereas Net Debt To EBITDA is forecasted to decline to 1.16. . Vince Holding's financial risk is the risk to Vince Holding stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Vince Holding'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. Vince Holding'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 Vince Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Vince Holding's stakeholders.
For most companies, including Vince Holding, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Vince Holding Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Vince Holding'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 0.4038 | Book Value 4.161 | Operating Margin 0.0152 | Profit Margin 0.0043 | Return On Assets 0.0006 |
Vince |
Given the importance of Vince Holding's capital structure, the first step in the capital decision process is for the management of Vince Holding 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 Vince Holding Corp to issue bonds at a reasonable cost.
Vince Holding Bond Ratings
Vince Holding Corp financial ratings play a critical role in determining how much Vince Holding have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Vince Holding's borrowing costs.| Piotroski F Score | 4 | Poor | View |
| Beneish M Score | (1.27) | Possible Manipulator | View |
Vince Holding Corp Debt to Cash Allocation
Many companies such as Vince Holding, 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.
Vince Holding Corp currently holds 128.46 M in liabilities with Debt to Equity (D/E) ratio of 6.22, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Vince Holding Corp has a current ratio of 1.28, suggesting that it may not have the ability to pay its financial obligations when due. Note, when we think about Vince Holding's use of debt, we should always consider it together with its cash and equity.Vince Holding Common Stock Shares Outstanding Over Time
Vince Holding Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Vince Holding 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.Vince Holding Debt Ratio | 23.0 |
Vince Holding Corporate Bonds Issued
Most Vince bonds can be classified according to their maturity, which is the date when Vince Holding Corp 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.
Vince Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Vince Holding Use of Financial Leverage
Vince Holding's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Vince Holding's total debt position, including all outstanding debt obligations, and compares it with Vince Holding's equity. Financial leverage can amplify the potential profits to Vince Holding's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Vince Holding is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 128.5 M | 203.9 M | |
| Net Debt | 128.1 M | 194.7 M | |
| Short Term Debt | 33.6 M | 37.6 M | |
| Long Term Debt | 44 M | 59.7 M | |
| Long Term Debt Total | 43.8 M | 56.6 M | |
| Short and Long Term Debt | 2.8 M | 2.6 M | |
| Net Debt To EBITDA | 3.51 | 1.16 | |
| Debt To Equity | 1.29 | 1.22 | |
| Interest Debt Per Share | 5.78 | 24.10 | |
| Debt To Assets | 0.27 | 0.23 | |
| Long Term Debt To Capitalization | 0.48 | 0.55 | |
| Total Debt To Capitalization | 0.56 | 0.55 | |
| Debt Equity Ratio | 1.29 | 1.22 | |
| Debt Ratio | 0.27 | 0.23 | |
| Cash Flow To Debt Ratio | 0.03 | 0.91 |
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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.When determining whether Vince Holding Corp is a strong investment it is important to analyze Vince Holding's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Vince Holding's future performance. For an informed investment choice regarding Vince Stock, refer to the following important reports:Check out the analysis of Vince Holding Fundamentals Over Time. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Is Apparel, Accessories & Luxury Goods 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 Vince Holding. If investors know Vince 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 Vince Holding listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.98) | Earnings Share 0.09 | Revenue Per Share 23.382 | Quarterly Revenue Growth 0.068 | Return On Assets 0.0006 |
The market value of Vince Holding Corp is measured differently than its book value, which is the value of Vince that is recorded on the company's balance sheet. Investors also form their own opinion of Vince Holding's value that differs from its market value or its book value, called intrinsic value, which is Vince Holding'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 Vince Holding's market value can be influenced by many factors that don't directly affect Vince Holding'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 Vince Holding's value and its price as these two are different measures arrived at by different means. Investors typically determine if Vince Holding is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Vince Holding'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.