Hannan Metals Valero Bond

HAN Stock  CAD 0.68  0.05  6.85%   
Hannan Metals has over 325,161 in debt which may indicate that it relies heavily on debt financing. At this time, Hannan Metals' Long Term Debt is fairly stable compared to the past year. Net Debt To EBITDA is likely to climb to 0.58 in 2024, whereas Short and Long Term Debt Total is likely to drop slightly above 183.7 K in 2024. . Hannan Metals' financial risk is the risk to Hannan Metals stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Hannan Metals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Hannan Metals' 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 Hannan Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Hannan Metals' stakeholders.
For most companies, including Hannan Metals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Hannan Metals, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Hannan Metals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
8.1287
Book Value
0.084
Return On Assets
(0.29)
Return On Equity
(0.46)
At this time, Hannan Metals' Liabilities And Stockholders Equity is fairly stable compared to the past year. Change To Liabilities is likely to climb to about 77.3 K in 2024, whereas Total Current Liabilities is likely to drop slightly above 308.9 K in 2024.
  
Check out the analysis of Hannan Metals Fundamentals Over Time.
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Given the importance of Hannan Metals' capital structure, the first step in the capital decision process is for the management of Hannan Metals 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 Hannan Metals to issue bonds at a reasonable cost.
Popular NameHannan Metals Valero Energy Partners
SpecializationOther Industrial Metals & Mining
Equity ISIN CodeCA4105841064
Bond Issue ISIN CodeUS91914JAA07
S&P Rating
Others
Maturity Date15th of December 2026
Issuance Date9th of December 2016
Coupon4.375 %
View All Hannan Metals Outstanding Bonds

Hannan Metals Outstanding Bond Obligations

Understaning Hannan Metals Use of Financial Leverage

Understanding the structure of Hannan Metals' debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Hannan Metals' 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 ReportedProjected for Next Year
Net Debt-3 M-2.8 M
Short and Long Term Debt Total193.4 K183.7 K
Short Term Debt193.4 K183.7 K
Long Term Debt308.2 K441.2 K
Short and Long Term Debt193.4 K183.7 K
Net Debt To EBITDA 0.55  0.58 
Debt To Equity 0.03  0.03 
Debt To Assets 0.03  0.03 
Long Term Debt To Capitalization 0.07  0.07 
Total Debt To Capitalization 0.04  0.04 
Debt Equity Ratio 0.03  0.03 
Debt Ratio 0.03  0.03 
Cash Flow To Debt Ratio(3.40)(3.23)
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Additional Tools for Hannan Stock Analysis

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