Red Cat Debt
| RCAT Stock | USD 11.77 2.50 26.97% |
Red Cat Holdings holds a debt-to-equity ratio of 0.036. At this time, Red Cat's Short and Long Term Debt is comparatively stable compared to the past year. Long Term Debt is likely to gain to about 715.7 K in 2024, whereas Short Term Debt is likely to drop slightly above 773.4 K in 2024. . Red Cat's financial risk is the risk to Red Cat stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Red Cat'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. Red Cat'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 Red Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Red Cat's stakeholders.
For most companies, including Red Cat, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Red Cat Holdings, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Red Cat'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 27.3676 | Book Value 0.433 | Operating Margin (2.75) | Profit Margin (1.62) | Return On Assets (0.27) |
Given that Red Cat'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 Red Cat 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 Red Cat to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Red Cat is said to be less leveraged. If creditors hold a majority of Red Cat's assets, the Company is said to be highly leveraged.
At this time, Red Cat's Liabilities And Stockholders Equity is comparatively stable compared to the past year. Non Current Liabilities Total is likely to gain to about 1.4 M in 2024, whereas Total Current Liabilities is likely to drop slightly above 2 M in 2024. Red |
Red Cat Bond Ratings
Red Cat Holdings financial ratings play a critical role in determining how much Red Cat 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 Red Cat's borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | 154.17 | Possible Manipulator | View |
Red Cat Holdings Debt to Cash Allocation
Red Cat Holdings currently holds 2.27 M in liabilities with Debt to Equity (D/E) ratio of 0.04, which may suggest the company is not taking enough advantage from borrowing. Red Cat Holdings has a current ratio of 11.02, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Red Cat's use of debt, we should always consider it together with its cash and equity.Red Cat Total Assets Over Time
Red Cat Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Red Cat 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.Red Cat Debt Ratio | 209.0 |
Red Cat Corporate Bonds Issued
Red Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Red Cat Use of Financial Leverage
Red Cat's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Red Cat's current equity. If creditors own a majority of Red Cat's assets, the company is considered highly leveraged. Understanding the composition and structure of Red Cat's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 2.3 M | 1.3 M | |
| Net Debt | -3.8 M | -3.6 M | |
| Short Term Debt | 1.1 M | 773.4 K | |
| Short and Long Term Debt | 751.6 K | 758.8 K | |
| Long Term Debt | 361.4 K | 715.7 K | |
| Long Term Debt Total | 361.4 K | 550.1 K | |
| Net Debt To EBITDA | 0.19 | 0.32 | |
| Debt To Equity | 0.02 | (0.47) | |
| Interest Debt Per Share | 0.02 | 50.19 | |
| Debt To Assets | 0.02 | 2.09 | |
| Long Term Debt To Capitalization | (0.16) | (0.15) | |
| Total Debt To Capitalization | 0.02 | (0.87) | |
| Debt Equity Ratio | 0.02 | (0.47) | |
| Debt Ratio | 0.02 | 2.09 | |
| Cash Flow To Debt Ratio | (19.63) | (0.86) |
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Additional Tools for Red Stock Analysis
When running Red Cat's price analysis, check to measure Red Cat's 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 Red Cat is operating at the current time. Most of Red Cat's value examination focuses on studying past and present price action to predict the probability of Red Cat's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Red Cat's price. Additionally, you may evaluate how the addition of Red Cat 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.