Alamos Gold Debt

AGI Stock  CAD 27.27  1.28  4.92%   
Alamos Gold holds a debt-to-equity ratio of 0.036. As of the 4th of December 2024, Cash Flow To Debt Ratio is likely to grow to 20.60, though Net Debt is likely to grow to (213.6 M). With a high degree of financial leverage come high-interest payments, which usually reduce Alamos Gold's Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Alamos Gold'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. Alamos Gold'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 Alamos Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Alamos Gold's stakeholders.
For most companies, including Alamos Gold, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Alamos Gold, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Alamos Gold'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
2.2221
Book Value
8.348
Operating Margin
0.3666
Profit Margin
0.1989
Return On Assets
0.0572
Given that Alamos Gold'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 Alamos Gold 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 Alamos Gold to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Alamos Gold is said to be less leveraged. If creditors hold a majority of Alamos Gold's assets, the Company is said to be highly leveraged.
At this time, Alamos Gold's Total Current Liabilities is very stable compared to the past year. As of the 4th of December 2024, Liabilities And Stockholders Equity is likely to grow to about 4.2 B, though Change To Liabilities is likely to grow to (109.2 K).
  
Check out the analysis of Alamos Gold Fundamentals Over Time.
To learn how to invest in Alamos Stock, please use our How to Invest in Alamos Gold guide.

Alamos Gold Debt to Cash Allocation

Alamos Gold has accumulated 700 K in total debt with debt to equity ratio (D/E) of 0.04, which may suggest the company is not taking enough advantage from borrowing. Alamos Gold has a current ratio of 2.21, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Alamos Gold until it has trouble settling it off, either with new capital or with free cash flow. So, Alamos Gold'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 Alamos Gold sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Alamos to invest in growth at high rates of return. When we think about Alamos Gold's use of debt, we should always consider it together with cash and equity.

Alamos Gold Total Assets Over Time

Alamos Gold Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Alamos Gold 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.

Alamos Gold Debt Ratio

    
  0.25   
It appears that most of the Alamos Gold's assets are financed through equity. 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 Alamos Gold's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Alamos Gold, which in turn will lower the firm's financial flexibility.

Alamos Gold Corporate Bonds Issued

Alamos Net Debt

Net Debt

(213.56 Million)

Alamos Gold reported last year Net Debt of (224.8 Million)

Understaning Alamos Gold Use of Financial Leverage

Leverage ratios show Alamos Gold'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 Alamos Gold'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 ReportedProjected for Next Year
Net Debt-224.8 M-213.6 M
Short and Long Term Debt Total700 K665 K
Short Term Debt360 K342 K
Long Term Debt1.4 M1.4 M
Short and Long Term Debt720 K684 K
Net Debt To EBITDA(0.46)(0.48)
Interest Debt Per Share 0.01  0.01 
Cash Flow To Debt Ratio 19.62  20.60 
Please read more on our technical analysis page.

Pair Trading with Alamos Gold

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Alamos Gold position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alamos Gold will appreciate offsetting losses from the drop in the long position's value.

Moving together with Alamos Stock

  0.72AG First Majestic SilverPairCorr
  0.66ORE Orezone Gold CorpPairCorr

Moving against Alamos Stock

  0.34TSLA Tesla Inc CDRPairCorr
The ability to find closely correlated positions to Alamos Gold could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Alamos Gold when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Alamos Gold - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Alamos Gold to buy it.
The correlation of Alamos Gold is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Alamos Gold moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Alamos Gold moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Alamos Gold can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether Alamos Gold offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Alamos Gold'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 Alamos Gold Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Alamos Gold Stock:
Check out the analysis of Alamos Gold Fundamentals Over Time.
To learn how to invest in Alamos Stock, please use our How to Invest in Alamos Gold guide.
You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Please note, there is a significant difference between Alamos Gold's value and its price as these two are different measures arrived at by different means. Investors typically determine if Alamos Gold is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Alamos Gold'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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.