Eaton Vance Debt

EOT Stock  USD 17.45  0.02  0.11%   
Net Debt To EBITDA is likely to gain to 2.94 in 2024, whereas Net Debt is likely to drop slightly above 21.4 M in 2024. . Eaton Vance's financial risk is the risk to Eaton Vance stockholders that is caused by an increase in debt.
 
Debt Ratio  
First Reported
2010-12-31
Previous Quarter
0.12216143
Current Value
0.0744
Quarterly Volatility
0.01979051
 
Credit Downgrade
 
Yuan Drop
 
Covid
Given that Eaton Vance'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 Eaton Vance 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 Eaton Vance to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Eaton Vance is said to be less leveraged. If creditors hold a majority of Eaton Vance's assets, the Company is said to be highly leveraged.
Liabilities And Stockholders Equity is likely to drop to about 281.1 M in 2024. Total Current Liabilities is likely to drop to about 889.9 K in 2024
  
Check out the analysis of Eaton Vance Fundamentals Over Time.

Eaton Vance Bond Ratings

Eaton Vance National financial ratings play a critical role in determining how much Eaton Vance 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 Eaton Vance's borrowing costs.
Piotroski F Score
6
HealthyView
Beneish M Score
(3.16)
Unlikely ManipulatorView

Eaton Vance Common Stock Shares Outstanding Over Time

Eaton Vance Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Eaton Vance 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.

Eaton Vance Debt Ratio

    
  7.44   
It appears most of the Eaton Vance'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 Eaton Vance's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Eaton Vance, which in turn will lower the firm's financial flexibility.

Eaton Vance Corporate Bonds Issued

Eaton Net Debt

Net Debt

21.39 Million

At this time, Eaton Vance's Net Debt is comparatively stable compared to the past year.

Understaning Eaton Vance Use of Financial Leverage

Eaton Vance's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Eaton Vance's current equity. If creditors own a majority of Eaton Vance's assets, the company is considered highly leveraged. Understanding the composition and structure of Eaton Vance's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Net Debt40.7 M21.4 M
Short Term Debt936.8 K550.8 K
Short and Long Term Debt Total40.7 M33.8 M
Net Debt To EBITDA 2.80  2.94 
Debt To Equity 0.14  0.08 
Interest Debt Per Share 2.72  1.47 
Debt To Assets 0.12  0.07 
Long Term Debt To Capitalization 0.12  0.08 
Total Debt To Capitalization 0.12  0.08 
Debt Equity Ratio 0.14  0.08 
Debt Ratio 0.12  0.07 
Cash Flow To Debt Ratio 0.27  0.20 
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Additional Tools for Eaton Stock Analysis

When running Eaton Vance's price analysis, check to measure Eaton Vance's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Eaton Vance is operating at the current time. Most of Eaton Vance's value examination focuses on studying past and present price action to predict the probability of Eaton Vance's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Eaton Vance's price. Additionally, you may evaluate how the addition of Eaton Vance to your portfolios can decrease your overall portfolio volatility.

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.