Foresight Autonomous Corporate Bonds and Leverage Analysis
| FRSX Stock | USD 0.65 0.01 0.78% |
Foresight Autonomous holds a debt-to-equity ratio of 0.059. At this time, Foresight Autonomous' Short and Long Term Debt Total is fairly stable compared to the past year. Short Term Debt is likely to rise to about 532.4 K in 2024, whereas Net Debt is likely to drop (14.7 M) in 2024. With a high degree of financial leverage come high-interest payments, which usually reduce Foresight Autonomous' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Foresight Autonomous' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Foresight Autonomous' 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 Foresight Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Foresight Autonomous' stakeholders.
For most companies, including Foresight Autonomous, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Foresight Autonomous Holdings, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Foresight Autonomous' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 1.2321 | Book Value 0.033 | Operating Margin (26.02) | Return On Assets (0.44) | Return On Equity (0.82) |
Foresight |
Given the importance of Foresight Autonomous' capital structure, the first step in the capital decision process is for the management of Foresight Autonomous 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 Foresight Autonomous Holdings to issue bonds at a reasonable cost.
Foresight Autonomous Bond Ratings
Foresight Autonomous Holdings financial ratings play a critical role in determining how much Foresight Autonomous 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 Foresight Autonomous' borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (3.50) | Unlikely Manipulator | View |
Foresight Autonomous Debt to Cash Allocation
As Foresight Autonomous Holdings follows its natural business cycle, the capital allocation decisions will not magically go away. Foresight Autonomous' 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.
Foresight Autonomous Holdings currently holds 1.63 M in liabilities with Debt to Equity (D/E) ratio of 0.06, which may suggest the company is not taking enough advantage from borrowing. Foresight Autonomous has a current ratio of 14.72, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Foresight Autonomous' use of debt, we should always consider it together with its cash and equity.Foresight Autonomous Common Stock Shares Outstanding Over Time
Foresight Autonomous 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 Foresight Autonomous' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Foresight Autonomous, which in turn will lower the firm's financial flexibility.Foresight Autonomous Corporate Bonds Issued
Foresight Net Debt
Understaning Foresight Autonomous Use of Financial Leverage
Understanding the structure of Foresight Autonomous' debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Foresight Autonomous' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
| Last Reported | Projected for Next Year | ||
| Net Debt | -14 M | -14.7 M | |
| Short and Long Term Debt Total | 1.6 M | 2 M | |
| Long Term Debt Total | 906.3 K | 805.6 K | |
| Short Term Debt | 468 K | 532.4 K | |
| Net Debt To EBITDA | 0.87 | 0.83 |
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When running Foresight Autonomous' price analysis, check to measure Foresight Autonomous' 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 Foresight Autonomous is operating at the current time. Most of Foresight Autonomous' value examination focuses on studying past and present price action to predict the probability of Foresight Autonomous' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Foresight Autonomous' price. Additionally, you may evaluate how the addition of Foresight Autonomous 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.