Sun Residential Current Debt
| SRES Stock | CAD 0.05 0.0009 1.83% |
Sun Residential Real holds a debt-to-equity ratio of 1.246. Net Debt is likely to climb to about 30 M in 2024, whereas Long Term Debt is likely to drop slightly above 25.2 M in 2024. . Sun Residential's financial risk is the risk to Sun Residential stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Sun Residential'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. Sun Residential'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 Sun Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Sun Residential's stakeholders.
Sun Residential Quarterly Net Debt |
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For most companies, including Sun Residential, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Sun Residential Real, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Sun Residential'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 0.4027 | Book Value 0.087 | Operating Margin 0.6199 | Profit Margin 0.0073 | Return On Assets 0.0263 |
Given that Sun Residential'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 Sun Residential 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 Sun Residential to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Sun Residential is said to be less leveraged. If creditors hold a majority of Sun Residential's assets, the Company is said to be highly leveraged.
Change To Liabilities is likely to climb to about 21 K in 2024, whereas Total Current Liabilities is likely to drop slightly above 281.7 K in 2024. Sun |
Sun Residential Real Debt to Cash Allocation
Many companies such as Sun Residential, 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.
Sun Residential Real has accumulated 32.74 M in total debt with debt to equity ratio (D/E) of 1.25, which is about average as compared to similar companies. Sun Residential Real has a current ratio of 12.44, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Sun Residential until it has trouble settling it off, either with new capital or with free cash flow. So, Sun Residential'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 Sun Residential Real sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Sun to invest in growth at high rates of return. When we think about Sun Residential's use of debt, we should always consider it together with cash and equity.Sun Residential Total Assets Over Time
Sun Residential 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 Sun Residential's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Sun Residential, which in turn will lower the firm's financial flexibility.Sun Net Debt
Net Debt |
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Understaning Sun Residential Use of Financial Leverage
Understanding the structure of Sun Residential's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Sun Residential's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
| Last Reported | Projected for Next Year | ||
| Net Debt | 27.7 M | 30 M | |
| Long Term Debt | 28.3 M | 25.2 M |
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Additional Tools for Sun Stock Analysis
When running Sun Residential's price analysis, check to measure Sun Residential'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 Sun Residential is operating at the current time. Most of Sun Residential's value examination focuses on studying past and present price action to predict the probability of Sun Residential's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Sun Residential's price. Additionally, you may evaluate how the addition of Sun Residential 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.