Kansas City Debt
| KCLIDelisted Stock | USD 26.78 0.03 0.11% |
Kansas City Life has over 0.0 in debt which may indicate that it relies heavily on debt financing. With a high degree of financial leverage come high-interest payments, which usually reduce Kansas City's Earnings Per Share (EPS).
Given that Kansas City's debt-to-equity ratio measures a OTC Stock's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Kansas City 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 Kansas City to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Kansas City is said to be less leveraged. If creditors hold a majority of Kansas City's assets, the OTC Stock is said to be highly leveraged.
Kansas |
Kansas City Life Debt to Cash Allocation
The company has a current ratio of 14.81, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Kansas City until it has trouble settling it off, either with new capital or with free cash flow. So, Kansas City'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 Kansas City Life sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Kansas to invest in growth at high rates of return. When we think about Kansas City's use of debt, we should always consider it together with cash and equity.Kansas City 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 Kansas City's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Kansas City, which in turn will lower the firm's financial flexibility.Kansas City Corporate Bonds Issued
Most Kansas bonds can be classified according to their maturity, which is the date when Kansas City Life has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Understaning Kansas City Use of Financial Leverage
Understanding the composition and structure of Kansas City's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Kansas City's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Kansas City Life Insurance Company provides insurance products and services in 49 states and the District of Columbia. Kansas City Life Insurance Company was incorporated in 1985 and is based in Kansas City, Missouri. Kansas City is traded on OTC Exchange in the United States. Please read more on our technical analysis page.
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Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any otc stock could be closely tied with the direction of predictive economic indicators such as signals in bureau of economic analysis. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Consideration for investing in Kansas OTC Stock
If you are still planning to invest in Kansas City Life 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 Kansas City's history and understand the potential risks before investing.
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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.