Brilliant Acquisition Debt
| BRLIDelisted Stock | USD 11.34 0.06 0.53% |
Brilliant Acquisition has over 3.65 Million in debt which may indicate that it relies heavily on debt financing. With a high degree of financial leverage come high-interest payments, which usually reduce Brilliant Acquisition's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Brilliant Acquisition'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. Brilliant Acquisition'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 Brilliant Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Brilliant Acquisition's stakeholders.
For most companies, including Brilliant Acquisition, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Brilliant Acquisition Corp, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Brilliant Acquisition's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Brilliant Acquisition'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 Brilliant Acquisition 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 Brilliant Acquisition to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Brilliant Acquisition is said to be less leveraged. If creditors hold a majority of Brilliant Acquisition's assets, the Company is said to be highly leveraged.
Brilliant |
Brilliant Acquisition Debt to Cash Allocation
As Brilliant Acquisition Corp follows its natural business cycle, the capital allocation decisions will not magically go away. Brilliant Acquisition'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.
Brilliant Acquisition Corp currently holds 3.65 M in liabilities with Debt to Equity (D/E) ratio of 6.22, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Brilliant Acquisition has a current ratio of 13.43, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Brilliant Acquisition's use of debt, we should always consider it together with its cash and equity.Brilliant Acquisition 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 Brilliant Acquisition's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Brilliant Acquisition, which in turn will lower the firm's financial flexibility.Brilliant Acquisition Corporate Bonds Issued
Most Brilliant bonds can be classified according to their maturity, which is the date when Brilliant Acquisition Corp 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 Brilliant Acquisition Use of Financial Leverage
Understanding the composition and structure of Brilliant Acquisition's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Brilliant Acquisition's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Brilliant Acquisition Corporation does not have significant operations. The company was incorporated in 2019 and is based in Shanghai, China. Brilliant Acquisition is traded on NASDAQ Exchange in the United States. 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 bureau of economic analysis. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Consideration for investing in Brilliant Stock
If you are still planning to invest in Brilliant Acquisition 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 Brilliant Acquisition's history and understand the potential risks before investing.
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |
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.