Dominion Energy Debt
| D Stock | USD 59.70 0.58 0.98% |
Dominion Energy holds a debt-to-equity ratio of 1.556. At present, Dominion Energy's Short and Long Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Cash Flow To Debt Ratio is expected to grow to 0.15, whereas Net Debt is forecasted to decline to about 24 B. . Dominion Energy's financial risk is the risk to Dominion Energy stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Dominion Energy'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. Dominion Energy'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 Dominion Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Dominion Energy's stakeholders.
Dominion Energy Quarterly Net Debt |
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For most companies, including Dominion Energy, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Dominion Energy, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Dominion Energy'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 1.9153 | Book Value 31.17 | Operating Margin 0.3598 | Profit Margin 0.1695 | Return On Assets 0.0259 |
Given that Dominion Energy'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 Dominion Energy 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 Dominion Energy to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Dominion Energy is said to be less leveraged. If creditors hold a majority of Dominion Energy's assets, the Company is said to be highly leveraged.
At present, Dominion Energy's Change To Liabilities is projected to increase significantly based on the last few years of reporting. Dominion |
Dominion Energy Bond Ratings
Dominion Energy financial ratings play a critical role in determining how much Dominion Energy 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 Dominion Energy's borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (2.86) | Unlikely Manipulator | View |
Dominion Energy Debt to Cash Allocation
Many companies such as Dominion Energy, 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.
Dominion Energy has accumulated 44.24 B in total debt with debt to equity ratio (D/E) of 1.56, which looks OK as compared to the sector. Dominion Energy has a current ratio of 0.7, which means it has a negative working capital and may have difficulties to pay out interest payments when they become due. Note however, debt could still be an excellent tool for Dominion to invest in growth at high rates of return. Dominion Energy Common Stock Shares Outstanding Over Time
Dominion Energy Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Dominion Energy 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.Dominion Energy Debt Ratio | 34.0 |
Dominion Energy Corporate Bonds Issued
Most Dominion bonds can be classified according to their maturity, which is the date when Dominion Energy 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.
Dominion Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Dominion Energy Use of Financial Leverage
Dominion Energy's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Dominion Energy's total debt position, including all outstanding debt obligations, and compares it with Dominion Energy's equity. Financial leverage can amplify the potential profits to Dominion Energy's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Dominion Energy is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 44.2 B | 24.3 B | |
| Net Debt | 44.1 B | 24 B | |
| Short Term Debt | 11 B | 11.5 B | |
| Long Term Debt | 33.1 B | 24.1 B | |
| Long Term Debt Total | 44.8 B | 33.1 B | |
| Short and Long Term Debt | 11 B | 11.5 B | |
| Net Debt To EBITDA | 6.46 | 3.84 | |
| Debt To Equity | 1.61 | 1.31 | |
| Interest Debt Per Share | 55.08 | 28.47 | |
| Debt To Assets | 0.41 | 0.34 | |
| Long Term Debt To Capitalization | 0.55 | 0.46 | |
| Total Debt To Capitalization | 0.62 | 0.49 | |
| Debt Equity Ratio | 1.61 | 1.31 | |
| Debt Ratio | 0.41 | 0.34 | |
| Cash Flow To Debt Ratio | 0.15 | 0.15 |
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Is Multi-Utilities 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 Dominion Energy. If investors know Dominion 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 Dominion Energy 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 5.846 | Dividend Share 2.67 | Earnings Share 2.71 | Revenue Per Share 17.411 | Quarterly Revenue Growth 0.034 |
The market value of Dominion Energy is measured differently than its book value, which is the value of Dominion that is recorded on the company's balance sheet. Investors also form their own opinion of Dominion Energy's value that differs from its market value or its book value, called intrinsic value, which is Dominion Energy'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 Dominion Energy's market value can be influenced by many factors that don't directly affect Dominion Energy'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 Dominion Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if Dominion Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Dominion Energy'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.