Nutritional High Current Debt
SPLIFDelisted Stock | USD 0.01 0.00 0.00% |
Nutritional High Int has over 92,406 in debt which may indicate that it relies heavily on debt financing. . Nutritional High's financial risk is the risk to Nutritional High stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Nutritional High'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. Nutritional High'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 Nutritional Pink Sheet's retail investors understand whether an upcoming fall or rise in the market will negatively affect Nutritional High's stakeholders.
For most companies, including Nutritional High, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Nutritional High International, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Nutritional High's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Given that Nutritional High'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 Nutritional High 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 Nutritional High to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Nutritional High is said to be less leveraged. If creditors hold a majority of Nutritional High's assets, the Company is said to be highly leveraged.
Nutritional |
Nutritional High Int Debt to Cash Allocation
Many companies such as Nutritional High, 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.
Nutritional High International has accumulated 92.41 K in total debt with debt to equity ratio (D/E) of 3.62, implying the company greatly relies on financing operations through barrowing. Nutritional High Int has a current ratio of 0.28, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. Debt can assist Nutritional High until it has trouble settling it off, either with new capital or with free cash flow. So, Nutritional High's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Nutritional High Int sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Nutritional to invest in growth at high rates of return. When we think about Nutritional High's use of debt, we should always consider it together with cash and equity.Nutritional High 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 Nutritional High's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Nutritional High, which in turn will lower the firm's financial flexibility.Understaning Nutritional High Use of Financial Leverage
Nutritional High's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Nutritional High's total debt position, including all outstanding debt obligations, and compares it with Nutritional High's equity. Financial leverage can amplify the potential profits to Nutritional High's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Nutritional High is unable to cover its debt costs.
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Other Consideration for investing in Nutritional Pink Sheet
If you are still planning to invest in Nutritional High Int check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Nutritional High's history and understand the potential risks before investing.
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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.