Westinghouse Air Debt
| WAB Stock | USD 198.19 4.11 2.03% |
Westinghouse Air Brake holds a debt-to-equity ratio of 0.453. At present, Westinghouse Air's Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt is expected to grow to about 4 B, whereas Long Term Debt Total is forecasted to decline to about 2.4 B. With a high degree of financial leverage come high-interest payments, which usually reduce Westinghouse Air's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Westinghouse Air'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. Westinghouse Air'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 Westinghouse Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Westinghouse Air's stakeholders.
For most companies, including Westinghouse Air, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Westinghouse Air Brake, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Westinghouse Air'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 3.3486 | Book Value 59.112 | Operating Margin 0.1652 | Profit Margin 0.1025 | Return On Assets 0.0545 |
Westinghouse |
Westinghouse Air Bond Ratings
Westinghouse Air Brake financial ratings play a critical role in determining how much Westinghouse Air 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 Westinghouse Air's borrowing costs.| Piotroski F Score | 6 | Healthy | View |
| Beneish M Score | (2.39) | Unlikely Manipulator | View |
Westinghouse Air Brake Debt to Cash Allocation
As Westinghouse Air Brake follows its natural business cycle, the capital allocation decisions will not magically go away. Westinghouse Air'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.
Westinghouse Air Brake has 4.38 B in debt with debt to equity (D/E) ratio of 0.45, which is OK given its current industry classification. Westinghouse Air Brake has a current ratio of 1.24, demonstrating that it may not have the ability to pay its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Westinghouse to invest in growth at high rates of return. Westinghouse Air Total Assets Over Time
Westinghouse Air Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Westinghouse Air 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.Westinghouse Air Debt Ratio | 40.0 |
Westinghouse Air Corporate Bonds Issued
Most Westinghouse bonds can be classified according to their maturity, which is the date when Westinghouse Air Brake 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.
Westinghouse Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning Westinghouse Air Use of Financial Leverage
Westinghouse Air's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Westinghouse Air's total debt position, including all outstanding debt obligations, and compares it with Westinghouse Air's equity. Financial leverage can amplify the potential profits to Westinghouse Air's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Westinghouse Air is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 4.4 B | 4.6 B | |
| Net Debt | 3.8 B | 4 B | |
| Short Term Debt | 842 M | 884.1 M | |
| Long Term Debt | 3.3 B | 3.5 B | |
| Long Term Debt Total | 4.3 B | 2.4 B | |
| Short and Long Term Debt | 781 M | 820 M | |
| Net Debt To EBITDA | 2.11 | 1.45 | |
| Debt To Equity | 0.39 | 0.41 | |
| Interest Debt Per Share | 23.98 | 25.18 | |
| Debt To Assets | 0.21 | 0.40 | |
| Long Term Debt To Capitalization | 0.24 | 0.23 | |
| Total Debt To Capitalization | 0.28 | 0.27 | |
| Debt Equity Ratio | 0.39 | 0.41 | |
| Debt Ratio | 0.21 | 0.40 | |
| Cash Flow To Debt Ratio | 0.30 | 0.30 |
Also Currently Popular
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 Westinghouse Air Brake offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Westinghouse Air's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Westinghouse Air Brake Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Westinghouse Air Brake Stock:Check out the analysis of Westinghouse Air Fundamentals Over Time. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Is Construction Machinery & Heavy Transportation Equipment 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 Westinghouse Air. If investors know Westinghouse 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 Westinghouse Air 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 0.226 | Dividend Share 0.77 | Earnings Share 5.99 | Revenue Per Share 58.76 | Quarterly Revenue Growth 0.044 |
The market value of Westinghouse Air Brake is measured differently than its book value, which is the value of Westinghouse that is recorded on the company's balance sheet. Investors also form their own opinion of Westinghouse Air's value that differs from its market value or its book value, called intrinsic value, which is Westinghouse Air'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 Westinghouse Air's market value can be influenced by many factors that don't directly affect Westinghouse Air'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 Westinghouse Air's value and its price as these two are different measures arrived at by different means. Investors typically determine if Westinghouse Air is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Westinghouse Air'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.