AW Revenue Royalties Corporate Bonds and Leverage Analysis
| AWRRFDelisted Stock | USD 26.76 0.00 0.00% |
AW Revenue Royalties holds a debt-to-equity ratio of 0.187. . AW Revenue's financial risk is the risk to AW Revenue stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
AW Revenue'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. AW Revenue'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 AWRRF Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect AW Revenue's stakeholders.
For most companies, including AW Revenue, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for AW Revenue Royalties, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, AW Revenue's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
AWRRF |
Given the importance of AW Revenue's capital structure, the first step in the capital decision process is for the management of AW Revenue 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 AW Revenue Royalties to issue bonds at a reasonable cost.
AW Revenue Royalties Debt to Cash Allocation
Many companies such as AW Revenue, 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.
AW Revenue Royalties has accumulated 59.8 M in total debt with debt to equity ratio (D/E) of 0.19, which may suggest the company is not taking enough advantage from borrowing. AW Revenue Royalties has a current ratio of 2.53, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist AW Revenue until it has trouble settling it off, either with new capital or with free cash flow. So, AW Revenue'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 AW Revenue Royalties sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for AWRRF to invest in growth at high rates of return. When we think about AW Revenue's use of debt, we should always consider it together with cash and equity.AW Revenue Assets Financed by Debt
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 AW Revenue's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of AW Revenue, which in turn will lower the firm's financial flexibility.AW Revenue Corporate Bonds Issued
Most AWRRF bonds can be classified according to their maturity, which is the date when AW Revenue Royalties 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.
Understaning AW Revenue Use of Financial Leverage
AW Revenue's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures AW Revenue's total debt position, including all outstanding debt obligations, and compares it with AW Revenue's equity. Financial leverage can amplify the potential profits to AW Revenue's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if AW Revenue is unable to cover its debt costs.
AW Revenue Royalties Income Fund, a limited purpose trust, holds the investment in AW Trade Marks Inc., which through its ownership interest in AW Trade Marks Limited Partnership owns the AW trade-marks used in the AW quick service restaurant business in Canada. AW Revenue Royalties Income Fund was founded in 2001 and is based in North Vancouver, Canada. AW Revenue operates under Restaurants classification in the United States and is traded on OTC Exchange. Please read more on our technical analysis page.
Currently Active Assets on Macroaxis
Check out Trending Equities to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in metropolitan statistical area. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Consideration for investing in AWRRF Pink Sheet
If you are still planning to invest in AW Revenue Royalties check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the AW Revenue's history and understand the potential risks before investing.
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |
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.