Mustang Bio Debt
| MBIO Stock | USD 0.20 0.01 5.26% |
Mustang Bio holds a debt-to-equity ratio of 0.353. At this time, Mustang Bio's Short and Long Term Debt is very stable compared to the past year. As of the 2nd of December 2024, Long Term Debt is likely to grow to about 33.1 M, while Short and Long Term Debt Total is likely to drop about 2.4 M. With a high degree of financial leverage come high-interest payments, which usually reduce Mustang Bio's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Mustang Bio'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. Mustang Bio'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 Mustang Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Mustang Bio's stakeholders.
For most companies, including Mustang Bio, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Mustang Bio, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Mustang Bio's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 31.7451 | Book Value (0.94) | Return On Assets (0.97) | Return On Equity (11.91) |
Given that Mustang Bio's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Mustang Bio 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 Mustang Bio to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Mustang Bio is said to be less leveraged. If creditors hold a majority of Mustang Bio's assets, the Company is said to be highly leveraged.
As of the 2nd of December 2024, Total Current Liabilities is likely to drop to about 9.2 M. In addition to that, Non Current Liabilities Total is likely to drop to about 2.1 MMustang |
Mustang Bio Bond Ratings
Mustang Bio financial ratings play a critical role in determining how much Mustang Bio 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 Mustang Bio's borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | (6.42) | Unlikely Manipulator | View |
Mustang Bio Debt to Cash Allocation
As Mustang Bio follows its natural business cycle, the capital allocation decisions will not magically go away. Mustang Bio's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Mustang Bio currently holds 2.5 M in liabilities with Debt to Equity (D/E) ratio of 0.35, which is about average as compared to similar companies. Mustang Bio has a current ratio of 9.76, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Mustang Bio's use of debt, we should always consider it together with its cash and equity.Mustang Bio Short Long Term Debt Total Over Time
Mustang Bio Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Mustang Bio 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.Mustang Bio Debt Ratio | 2.78 |
Mustang Bio Corporate Bonds Issued
Mustang Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Mustang Bio Use of Financial Leverage
Leverage ratios show Mustang Bio's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Mustang Bio's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 2.5 M | 2.4 M | |
| Net Debt | -3.7 M | -3.9 M | |
| Short and Long Term Debt | 1.1 M | 1.4 M | |
| Short Term Debt | 1 M | 1 M | |
| Long Term Debt | 31.6 M | 33.1 M | |
| Long Term Debt Total | 11 M | 9.7 M | |
| Net Debt To EBITDA | 0.08 | 0.07 | |
| Debt To Equity | 4.23 | 4.44 | |
| Interest Debt Per Share | 0.21 | 0.20 | |
| Debt To Assets | 0.03 | 0.03 | |
| Long Term Debt To Capitalization | 0.33 | 0.22 | |
| Total Debt To Capitalization | 0.81 | 0.85 | |
| Debt Equity Ratio | 4.23 | 4.44 | |
| Debt Ratio | 0.03 | 0.03 | |
| Cash Flow To Debt Ratio | (95.15) | (99.91) |
Pair Trading with Mustang Bio
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 Mustang Bio 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 Mustang Bio will appreciate offsetting losses from the drop in the long position's value.Moving together with Mustang Stock
Moving against Mustang Stock
| 0.56 | VCYT | Veracyte | PairCorr |
| 0.45 | VERA | Vera Therapeutics | PairCorr |
| 0.4 | DRTS | Alpha Tau Medical | PairCorr |
| 0.39 | DMAC | DiaMedica Therapeutics Trending | PairCorr |
The ability to find closely correlated positions to Mustang Bio could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Mustang Bio 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 Mustang Bio - 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 Mustang Bio to buy it.
The correlation of Mustang Bio 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 Mustang Bio moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Mustang Bio 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 Mustang Bio 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 the analysis of Mustang Bio Fundamentals Over Time. To learn how to invest in Mustang Stock, please use our How to Invest in Mustang Bio guide.You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Is Biotechnology 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 Mustang Bio. If investors know Mustang 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 Mustang Bio listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (1.33) | Revenue Per Share (0) | Return On Assets (0.97) | Return On Equity (11.91) |
The market value of Mustang Bio is measured differently than its book value, which is the value of Mustang that is recorded on the company's balance sheet. Investors also form their own opinion of Mustang Bio's value that differs from its market value or its book value, called intrinsic value, which is Mustang Bio'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 Mustang Bio's market value can be influenced by many factors that don't directly affect Mustang Bio'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 Mustang Bio's value and its price as these two are different measures arrived at by different means. Investors typically determine if Mustang Bio is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Mustang Bio'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.