Red Robin Debt
| RRGB Stock | USD 5.40 0.01 0.18% |
At present, Red Robin's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short and Long Term Debt Total is expected to grow to about 649.5 M, whereas Long Term Debt is forecasted to decline to about 160.4 M. With a high degree of financial leverage come high-interest payments, which usually reduce Red Robin's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.28 | Current Value 0.28 | Quarterly Volatility 0.06160494 |
Given that Red Robin'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 Robin 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 Robin to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Red Robin is said to be less leveraged. If creditors hold a majority of Red Robin's assets, the Company is said to be highly leveraged.
The current year's Change To Liabilities is expected to grow to about 14.8 M, whereas Liabilities And Stockholders Equity is forecasted to decline to about 633.8 M. Red |
Red Robin Bond Ratings
Red Robin Gourmet financial ratings play a critical role in determining how much Red Robin 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 Robin's borrowing costs.| Piotroski F Score | 5 | Healthy | View |
| Beneish M Score | (3.48) | Unlikely Manipulator | View |
Red Robin Gourmet Debt to Cash Allocation
As Red Robin Gourmet follows its natural business cycle, the capital allocation decisions will not magically go away. Red Robin'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.
Red Robin Gourmet currently holds 618.54 M in liabilities. Red Robin Gourmet has a current ratio of 0.53, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Red Robin's use of debt, we should always consider it together with its cash and equity.Red Robin Total Assets Over Time
Red Robin Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Red Robin 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 Robin Debt Ratio | 28.0 |
Red Robin Corporate Bonds Issued
Most Red bonds can be classified according to their maturity, which is the date when Red Robin Gourmet 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.
Red Net Debt
Net Debt |
|
Understaning Red Robin Use of Financial Leverage
Red Robin's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Red Robin's total debt position, including all outstanding debt obligations, and compares it with Red Robin's equity. Financial leverage can amplify the potential profits to Red Robin's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Red Robin is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | 587.2 M | 616.5 M | |
| Long Term Debt | 182.6 M | 160.4 M | |
| Short and Long Term Debt Total | 618.5 M | 649.5 M | |
| Short Term Debt | 44.8 M | 34.2 M | |
| Long Term Debt Total | 192.4 M | 188.8 M | |
| Short and Long Term Debt | 3 M | 2.9 M | |
| Net Debt To EBITDA | 7.45 | 7.83 | |
| Debt To Equity | (8.04) | (7.64) | |
| Interest Debt Per Share | 11.89 | 8.97 | |
| Debt To Assets | 0.25 | 0.28 | |
| Long Term Debt To Capitalization | 1.01 | 1.06 | |
| Total Debt To Capitalization | 1.01 | 1.06 | |
| Debt Equity Ratio | (8.04) | (7.64) | |
| Debt Ratio | 0.25 | 0.28 | |
| Cash Flow To Debt Ratio | (0.01) | (0.01) |
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether Red Robin Gourmet offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Red Robin's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Red Robin Gourmet Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Red Robin Gourmet Stock:Check out the analysis of Red Robin Fundamentals Over Time. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Is Hotels, Restaurants & Leisure 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 Red Robin. If investors know Red 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 Red Robin listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (3.29) | Revenue Per Share 81.497 | Quarterly Revenue Growth (0.01) | Return On Assets (0.02) | Return On Equity (2.38) |
The market value of Red Robin Gourmet is measured differently than its book value, which is the value of Red that is recorded on the company's balance sheet. Investors also form their own opinion of Red Robin's value that differs from its market value or its book value, called intrinsic value, which is Red Robin'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 Red Robin's market value can be influenced by many factors that don't directly affect Red Robin'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 Red Robin's value and its price as these two are different measures arrived at by different means. Investors typically determine if Red Robin is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Red Robin'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.