Goldman Sachs Debt

GS Stock  USD 605.43  0.07  0.01%   
Goldman Sachs Group has over 333.25 Billion in debt which may indicate that it relies heavily on debt financing. At this time, Goldman Sachs' Net Debt is comparatively stable compared to the past year. Debt To Equity is likely to gain to 4.17 in 2024, whereas Short Term Debt is likely to drop slightly above 64.4 B in 2024. . Goldman Sachs' financial risk is the risk to Goldman Sachs stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Goldman Sachs' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Goldman Sachs' 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 Goldman Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Goldman Sachs' stakeholders.
For most companies, including Goldman Sachs, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Goldman Sachs Group, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Goldman Sachs' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
1.7536
Book Value
327.611
Operating Margin
0.3274
Profit Margin
0.2465
Return On Assets
0.0074
At this time, Goldman Sachs' Total Current Liabilities is comparatively stable compared to the past year. Non Current Liabilities Total is likely to gain to about 1.6 T in 2024, whereas Liabilities And Stockholders Equity is likely to drop slightly above 940.1 B in 2024.
  
Check out the analysis of Goldman Sachs Fundamentals Over Time.

Goldman Sachs Bond Ratings

Goldman Sachs Group financial ratings play a critical role in determining how much Goldman Sachs 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 Goldman Sachs' borrowing costs.
Piotroski F Score
5
HealthyView
Beneish M Score
(3.14)
Unlikely ManipulatorView

Goldman Sachs Group Debt to Cash Allocation

Many companies such as Goldman Sachs, 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.
Goldman Sachs Group reports 333.25 B of total liabilities with total debt to equity ratio (D/E) of 4.86, which implies that the company may not be able to produce enough cash to satisfy its debt commitments. Goldman Sachs Group has a current ratio of 1.67, which is generally considered normal. Note however, debt could still be an excellent tool for Goldman to invest in growth at high rates of return.

Goldman Sachs Total Assets Over Time

Goldman Sachs Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Goldman Sachs 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.

Goldman Sachs Debt Ratio

    
  20.0   
It appears most of the Goldman Sachs' 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 Goldman Sachs' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Goldman Sachs, which in turn will lower the firm's financial flexibility.

Goldman Sachs Corporate Bonds Issued

Goldman Short Long Term Debt Total

Short Long Term Debt Total

251.1 Billion

At this time, Goldman Sachs' Short and Long Term Debt Total is comparatively stable compared to the past year.

Understaning Goldman Sachs Use of Financial Leverage

Goldman Sachs' financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Goldman Sachs' current equity. If creditors own a majority of Goldman Sachs' assets, the company is considered highly leveraged. Understanding the composition and structure of Goldman Sachs' outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Short and Long Term Debt Total333.2 B251.1 B
Net Debt91.7 B107.1 B
Short Term Debt83.1 B64.4 B
Long Term Debt247.9 B190.6 B
Long Term Debt Total284.1 B243.9 B
Short and Long Term Debt83.1 B50.8 B
Net Debt To EBITDA 6.76  6.42 
Debt To Equity 2.77  4.17 
Interest Debt Per Share1.1 K1.2 K
Debt To Assets 0.20  0.20 
Long Term Debt To Capitalization 0.68  0.78 
Total Debt To Capitalization 0.73  0.86 
Debt Equity Ratio 2.77  4.17 
Debt Ratio 0.20  0.20 
Cash Flow To Debt Ratio(0.04)(0.04)
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Additional Tools for Goldman Stock Analysis

When running Goldman Sachs' price analysis, check to measure Goldman Sachs' 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 Goldman Sachs is operating at the current time. Most of Goldman Sachs' value examination focuses on studying past and present price action to predict the probability of Goldman Sachs' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Goldman Sachs' price. Additionally, you may evaluate how the addition of Goldman Sachs 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.