Real Good Debt
| RGF Stock | USD 0.26 0.01 3.70% |
Real Good Food has over 108.75 Million in debt which may indicate that it relies heavily on debt financing. At this time, Real Good's Debt To Equity is most likely to increase slightly in the upcoming years. The Real Good's current Debt Equity Ratio is estimated to increase to 1.88, while Short and Long Term Debt is projected to decrease to roughly 316.4 K. . Real Good's financial risk is the risk to Real Good stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Real Good'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. Real Good'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 Real Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Real Good's stakeholders.
Real Good Quarterly Net Debt |
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For most companies, including Real Good, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Real Good Food, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Real Good'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 0.1923 | Book Value 2.497 | Operating Margin (0.16) | Profit Margin (0.1) | Return On Assets (0.18) |
Given that Real Good'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 Real Good 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 Real Good to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Real Good is said to be less leveraged. If creditors hold a majority of Real Good's assets, the Company is said to be highly leveraged.
At this time, Real Good's Liabilities And Stockholders Equity is most likely to increase significantly in the upcoming years. The Real Good's current Non Current Liabilities Total is estimated to increase to about 128.4 M, while Total Current Liabilities is projected to decrease to roughly 21.6 M. Real |
Real Good Food Debt to Cash Allocation
Many companies such as Real Good, 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.
Real Good Food has 108.75 M in debt with debt to equity (D/E) ratio of 5.8, demonstrating that the company may be unable to create cash to meet all of its financial commitments. Real Good Food has a current ratio of 2.11, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Note however, debt could still be an excellent tool for Real to invest in growth at high rates of return. Real Good Total Assets Over Time
Real Good Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Real Good 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.Real Good Debt Ratio | 58.0 |
Real Good Corporate Bonds Issued
Most Real bonds can be classified according to their maturity, which is the date when Real Good Food 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.
Real Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Real Good Use of Financial Leverage
Real Good's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Real Good's total debt position, including all outstanding debt obligations, and compares it with Real Good's equity. Financial leverage can amplify the potential profits to Real Good's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Real Good is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 125.1 M | 131.3 M | |
| Net Debt | 119 M | 124.9 M | |
| Long Term Debt | 79.9 M | 42.9 M | |
| Short and Long Term Debt | 333 K | 316.4 K | |
| Short Term Debt | 5.9 M | 3.5 M | |
| Net Debt To EBITDA | (2.66) | (2.79) | |
| Debt To Equity | 1.79 | 1.88 | |
| Interest Debt Per Share | 11.23 | 6.38 | |
| Debt To Assets | 0.61 | 0.58 | |
| Long Term Debt To Capitalization | 0.76 | 0.73 | |
| Total Debt To Capitalization | 0.77 | 0.73 | |
| Debt Equity Ratio | 1.79 | 1.88 | |
| Debt Ratio | 0.61 | 0.58 | |
| Cash Flow To Debt Ratio | (0.94) | (0.99) |
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When determining whether Real Good Food is a strong investment it is important to analyze Real Good'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 Real Good's future performance. For an informed investment choice regarding Real Stock, refer to the following important reports:Check out the analysis of Real Good Fundamentals Over Time. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Is Packaged Foods & Meats 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 Real Good. If investors know Real 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 Real Good listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (2.06) | Revenue Per Share 21.335 | Quarterly Revenue Growth 0.48 | Return On Assets (0.18) | Return On Equity (31.64) |
The market value of Real Good Food is measured differently than its book value, which is the value of Real that is recorded on the company's balance sheet. Investors also form their own opinion of Real Good's value that differs from its market value or its book value, called intrinsic value, which is Real Good'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 Real Good's market value can be influenced by many factors that don't directly affect Real Good'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 Real Good's value and its price as these two are different measures arrived at by different means. Investors typically determine if Real Good is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Real Good'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.