Harbor Diversified Corporate Bonds and Leverage Analysis
| HRBRDelisted Stock | USD 2.25 0.02 0.88% |
Harbor Diversified holds a debt-to-equity ratio of 0.362. . Harbor Diversified's financial risk is the risk to Harbor Diversified stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Harbor Diversified'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. Harbor Diversified'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 Harbor Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect Harbor Diversified's stakeholders.
For most companies, including Harbor Diversified, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Harbor Diversified, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Harbor Diversified's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Harbor |
Given the importance of Harbor Diversified's capital structure, the first step in the capital decision process is for the management of Harbor Diversified 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 Harbor Diversified to issue bonds at a reasonable cost.
Harbor Diversified Debt to Cash Allocation
Many companies such as Harbor Diversified, 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.
Harbor Diversified currently holds 65.94 M in liabilities with Debt to Equity (D/E) ratio of 0.36, which is about average as compared to similar companies. Harbor Diversified has a current ratio of 2.91, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Harbor Diversified until it has trouble settling it off, either with new capital or with free cash flow. So, Harbor Diversified's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Harbor Diversified sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Harbor to invest in growth at high rates of return. When we think about Harbor Diversified's use of debt, we should always consider it together with cash and equity.Harbor Diversified 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 Harbor Diversified's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Harbor Diversified, which in turn will lower the firm's financial flexibility.Harbor Diversified Corporate Bonds Issued
Understaning Harbor Diversified Use of Financial Leverage
Harbor Diversified's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Harbor Diversified's current equity. If creditors own a majority of Harbor Diversified's assets, the company is considered highly leveraged. Understanding the composition and structure of Harbor Diversified's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Harbor Diversified, Inc., together with its subsidiaries, provides air transportation services in the United States. Harbor Diversified, Inc. was incorporated in 1992 and is headquartered in Appleton, Wisconsin. Harbor Biosciences operates under Airlines classification in the United States and is traded on OTC Exchange. It employs 1212 people. Please read more on our technical analysis page.
Pair Trading with Harbor Diversified
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Harbor Diversified position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Harbor Diversified will appreciate offsetting losses from the drop in the long position's value.The ability to find closely correlated positions to Harbor Diversified could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Harbor Diversified when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Harbor Diversified - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Harbor Diversified to buy it.
The correlation of Harbor Diversified is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Harbor Diversified moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Harbor Diversified moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Harbor Diversified can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Risk vs Return Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of labor statistics. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Consideration for investing in Harbor Pink Sheet
If you are still planning to invest in Harbor Diversified check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Harbor Diversified's history and understand the potential risks before investing.
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |
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.