Golden Minerals Volcan Bond

AUMN Stock  CAD 0.14  0.01  6.67%   
Golden Minerals holds a debt-to-equity ratio of 0.7. At this time, Golden Minerals' Debt To Equity is very stable compared to the past year. As of the 22nd of December 2024, Total Debt To Capitalization is likely to grow to 0.32, while Short and Long Term Debt Total is likely to drop about 126.3 K. With a high degree of financial leverage come high-interest payments, which usually reduce Golden Minerals' Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Golden Minerals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Golden Minerals' 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 Golden Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Golden Minerals' stakeholders.
For most companies, including Golden Minerals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Golden Minerals, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Golden Minerals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
9.4791
Book Value
0.363
Operating Margin
(2.67)
Return On Assets
(0.44)
Return On Equity
(4.95)
As of the 22nd of December 2024, Change To Liabilities is likely to grow to about 3.6 M, while Total Current Liabilities is likely to drop about 5.4 M.
  
Check out the analysis of Golden Minerals Fundamentals Over Time.
To learn how to invest in Golden Stock, please use our How to Invest in Golden Minerals guide.
View Bond Profile
Given the importance of Golden Minerals' capital structure, the first step in the capital decision process is for the management of Golden Minerals 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 Golden Minerals to issue bonds at a reasonable cost.
Popular NameGolden Minerals Volcan Compania Minera
SpecializationOther Precious Metals & Mining
Equity ISIN CodeUS3811191069
Bond Issue ISIN CodeUSP98047AC08
S&P Rating
Others
Maturity Date11th of February 2026
Issuance Date11th of February 2021
Coupon4.375 %
View All Golden Minerals Outstanding Bonds

Golden Minerals Outstanding Bond Obligations

Understaning Golden Minerals Use of Financial Leverage

Leverage ratios show Golden Minerals' 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 Golden Minerals' 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
Short and Long Term Debt Total133 K126.3 K
Net Debt-3.5 M-3.3 M
Short Term Debt105 K99.8 K
Short and Long Term Debt3.3 MM
Net Debt To EBITDA 0.44  0.41 
Debt To Equity 0.55  0.58 
Debt To Assets 0.20  0.17 
Long Term Debt To Capitalization(0.04)(0.04)
Total Debt To Capitalization 0.29  0.32 
Debt Equity Ratio 0.55  0.58 
Debt Ratio 0.20  0.17 
Cash Flow To Debt Ratio(2.42)(2.54)
Please read more on our technical analysis page.

Pair Trading with Golden Minerals

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 Golden Minerals 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 Golden Minerals will appreciate offsetting losses from the drop in the long position's value.

Moving together with Golden Stock

  0.69AG First Majestic SilverPairCorr
  0.82IE Ivanhoe EnergyPairCorr
  0.72FDY Faraday Copper CorpPairCorr

Moving against Golden Stock

  0.74QNC Quantum NumbersPairCorr
  0.71DBO D Box TechnologiesPairCorr
  0.68OM Osisko MetalsPairCorr
  0.67AQN-PD Algonquin Power UtilitiesPairCorr
  0.66ENB-PH Enbridge H CumPairCorr
The ability to find closely correlated positions to Golden Minerals could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Golden Minerals 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 Golden Minerals - 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 Golden Minerals to buy it.
The correlation of Golden Minerals 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 Golden Minerals moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Golden Minerals 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 Golden Minerals 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 Golden Minerals offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Golden Minerals' 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 Golden Minerals Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Golden Minerals Stock:
Check out the analysis of Golden Minerals Fundamentals Over Time.
To learn how to invest in Golden Stock, please use our How to Invest in Golden Minerals guide.
You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Please note, there is a significant difference between Golden Minerals' value and its price as these two are different measures arrived at by different means. Investors typically determine if Golden Minerals is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Golden Minerals' 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.