Solaris Energy Current Debt
| SEI Stock | 24.65 0.18 0.74% |
The current Long Term Debt is estimated to decrease to about 20.9 M. The current Net Debt is estimated to decrease to about 19.3 M With a high degree of financial leverage come high-interest payments, which usually reduce Solaris Energy's Earnings Per Share (EPS).
Given that Solaris Energy'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 Solaris Energy 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 Solaris Energy to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Solaris Energy is said to be less leveraged. If creditors hold a majority of Solaris Energy's assets, the Company is said to be highly leveraged.
The Solaris Energy's current Total Current Liabilities is estimated to increase to about 39.2 M, while Non Current Liabilities Total is projected to decrease to under 99.1 M. Solaris |
Solaris Energy Financial Rating
Solaris Energy Infrastructure, financial ratings play a critical role in determining how much Solaris Energy 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 Solaris Energy's borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | (3.57) | Unlikely Manipulator | View |
Solaris Energy Total Assets Over Time
Solaris Energy Assets Financed by Debt
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 Solaris Energy's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Solaris Energy, which in turn will lower the firm's financial flexibility.Understaning Solaris Energy Use of Financial Leverage
Understanding the composition and structure of Solaris Energy's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Solaris Energy's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 30 M | 20.9 M | |
| Net Debt | 21.8 M | 19.3 M |
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When determining whether Solaris Energy Infra offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Solaris Energy'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 Solaris Energy Infrastructure, Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Solaris Energy Infrastructure, Stock:Check out the analysis of Solaris Energy Fundamentals Over Time. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Is Oil & Gas Equipment & 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 Solaris Energy. If investors know Solaris 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 Solaris Energy listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.17) | Dividend Share 0.47 | Earnings Share 0.66 | Revenue Per Share 9.563 | Quarterly Revenue Growth (0.04) |
The market value of Solaris Energy Infra is measured differently than its book value, which is the value of Solaris that is recorded on the company's balance sheet. Investors also form their own opinion of Solaris Energy's value that differs from its market value or its book value, called intrinsic value, which is Solaris Energy'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 Solaris Energy's market value can be influenced by many factors that don't directly affect Solaris Energy'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 Solaris Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if Solaris Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Solaris Energy'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.