LanzaTech Global Debt

LNZA Stock   1.24  0.07  5.98%   
At present, LanzaTech Global's Debt To Assets are projected to increase slightly based on the last few years of reporting. The current year's Debt Ratio is expected to grow to 0.09, whereas Short and Long Term Debt Total is forecasted to decline to about 11.9 M. With a high degree of financial leverage come high-interest payments, which usually reduce LanzaTech Global's Earnings Per Share (EPS).
 
Debt Ratio  
First Reported
2010-12-31
Previous Quarter
0.08253319
Current Value
0.0919
Quarterly Volatility
0.0519615
 
Credit Downgrade
 
Yuan Drop
 
Covid
The current year's Non Current Liabilities Total is expected to grow to about 104.3 M, whereas Total Current Liabilities is forecasted to decline to about 19.8 M.
  
Check out the analysis of LanzaTech Global Fundamentals Over Time.
For information on how to trade LanzaTech Stock refer to our How to Trade LanzaTech Stock guide.

LanzaTech Global Bond Ratings

LanzaTech Global financial ratings play a critical role in determining how much LanzaTech Global 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 LanzaTech Global's borrowing costs.
Piotroski F Score
5
HealthyView
Beneish M Score
(2.93)
Unlikely ManipulatorView

LanzaTech Global Total Assets Over Time

LanzaTech Global Assets Financed by Debt

The debt-to-assets ratio shows the degree to which LanzaTech Global 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.

LanzaTech Global Debt Ratio

    
  9.19   
It appears most of the LanzaTech Global's 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 LanzaTech Global's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of LanzaTech Global, which in turn will lower the firm's financial flexibility.

LanzaTech Global Corporate Bonds Issued

Most LanzaTech bonds can be classified according to their maturity, which is the date when LanzaTech Global 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.

LanzaTech Short Long Term Debt Total

Short Long Term Debt Total

11.9 Million

At present, LanzaTech Global's Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting.

Understaning LanzaTech Global Use of Financial Leverage

LanzaTech Global's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures LanzaTech Global's total debt position, including all outstanding debt obligations, and compares it with LanzaTech Global's equity. Financial leverage can amplify the potential profits to LanzaTech Global's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if LanzaTech Global is unable to cover its debt costs.
Last ReportedProjected for Next Year
Short and Long Term Debt Total19.9 M11.9 M
Net Debt-56.3 M-59.2 M
Long Term Debt2.8 M2.5 M
Short and Long Term Debt513 K456 K
Short Term Debt126 K119.7 K
Net Debt To EBITDA 0.55  0.52 
Debt To Equity 0.17  0.11 
Interest Debt Per Share 0.11  0.11 
Debt To Assets 0.08  0.09 
Long Term Debt To Capitalization 0.13  0.07 
Total Debt To Capitalization 0.15  0.09 
Debt Equity Ratio 0.17  0.11 
Debt Ratio 0.08  0.09 
Cash Flow To Debt Ratio(4.88)(5.12)
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When determining whether LanzaTech Global is a strong investment it is important to analyze LanzaTech Global's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact LanzaTech Global's future performance. For an informed investment choice regarding LanzaTech Stock, refer to the following important reports:
Check out the analysis of LanzaTech Global Fundamentals Over Time.
For information on how to trade LanzaTech Stock refer to our How to Trade LanzaTech Stock guide.
You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Is Environmental & Facilities Services space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of LanzaTech Global. If investors know LanzaTech will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about LanzaTech Global listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share
(0.65)
Revenue Per Share
0.295
Quarterly Revenue Growth
(0.49)
Return On Assets
(0.27)
Return On Equity
(1.82)
The market value of LanzaTech Global is measured differently than its book value, which is the value of LanzaTech that is recorded on the company's balance sheet. Investors also form their own opinion of LanzaTech Global's value that differs from its market value or its book value, called intrinsic value, which is LanzaTech Global's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because LanzaTech Global's market value can be influenced by many factors that don't directly affect LanzaTech Global's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between LanzaTech Global's value and its price as these two are different measures arrived at by different means. Investors typically determine if LanzaTech Global is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, LanzaTech Global's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

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.