Zions Bancorporation Corporate Bonds and Leverage Analysis
| ZION Stock | USD 53.34 0.45 0.85% |
Zions Bancorporation holds a debt-to-equity ratio of 0.11. At this time, Zions Bancorporation's Debt To Equity is very stable compared to the past year. As of the 26th of February 2025, Interest Debt Per Share is likely to grow to 47.40, while Long Term Debt is likely to drop about 460 M. With a high degree of financial leverage come high-interest payments, which usually reduce Zions Bancorporation's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Zions Bancorporation'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. Zions Bancorporation'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 Zions Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Zions Bancorporation's stakeholders.
For most companies, including Zions Bancorporation, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Zions Bancorporation, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Zions Bancorporation's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
As of the 26th of February 2025, Total Current Liabilities is likely to grow to about 30 B. Also, Liabilities And Stockholders Equity is likely to grow to about 93.2 BZions |
Given the importance of Zions Bancorporation's capital structure, the first step in the capital decision process is for the management of Zions Bancorporation 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 Zions Bancorporation to issue bonds at a reasonable cost.
Zions Bancorporation Bond Ratings
Zions Bancorporation financial ratings play a critical role in determining how much Zions Bancorporation 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 Zions Bancorporation's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (2.43) | Unlikely Manipulator | View |
Zions Bancorporation Debt to Cash Allocation
As Zions Bancorporation follows its natural business cycle, the capital allocation decisions will not magically go away. Zions Bancorporation'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.
Zions Bancorporation currently holds 4.78 B in liabilities with Debt to Equity (D/E) ratio of 0.11, which may suggest the company is not taking enough advantage from borrowing. Note, when we think about Zions Bancorporation's use of debt, we should always consider it together with its cash and equity.Zions Bancorporation Total Assets Over Time
Zions Bancorporation Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Zions Bancorporation 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.Zions Bancorporation Debt Ratio | 7.65 |
Zions Bancorporation Corporate Bonds Issued
Zions Bancorporation issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Zions Bancorporation uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt.
Zions Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Zions Bancorporation Use of Financial Leverage
Leverage ratios show Zions Bancorporation's 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 Zions Bancorporation's 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).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 4.8 B | 5 B | |
| Net Debt | 4.8 B | 5 B | |
| Short Term Debt | 3.8 B | 4 B | |
| Long Term Debt | 484.2 M | 460 M | |
| Long Term Debt Total | 585.9 M | 988.5 M | |
| Short and Long Term Debt | 1.8 B | 2.3 B | |
| Net Debt To EBITDA | 4.73 | 4.96 | |
| Debt To Equity | 0.78 | 1.03 | |
| Interest Debt Per Share | 45.14 | 47.40 | |
| Debt To Assets | 0.05 | 0.08 | |
| Long Term Debt To Capitalization | 0.13 | 0.13 | |
| Total Debt To Capitalization | 0.44 | 0.45 | |
| Debt Equity Ratio | 0.78 | 1.03 | |
| Debt Ratio | 0.05 | 0.08 | |
| Cash Flow To Debt Ratio | 0.39 | 0.27 |
Check out the analysis of Zions Bancorporation Fundamentals Over Time. To learn how to invest in Zions Stock, please use our How to Invest in Zions Bancorporation guide.You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Is Regional Banks 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 Zions Bancorporation. If investors know Zions 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 Zions Bancorporation 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 0.72 | Dividend Share 1.66 | Earnings Share 4.95 | Revenue Per Share | Quarterly Revenue Growth 0.066 |
The market value of Zions Bancorporation is measured differently than its book value, which is the value of Zions that is recorded on the company's balance sheet. Investors also form their own opinion of Zions Bancorporation's value that differs from its market value or its book value, called intrinsic value, which is Zions Bancorporation'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 Zions Bancorporation's market value can be influenced by many factors that don't directly affect Zions Bancorporation'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 Zions Bancorporation's value and its price as these two are different measures arrived at by different means. Investors typically determine if Zions Bancorporation is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Zions Bancorporation'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.