Sunstone Hotel Investors 86787GAJ1 Bond
| UF2 Stock | EUR 10.10 0.10 0.98% |
Sunstone Hotel Investors has over 590.65 Million in debt which may indicate that it relies heavily on debt financing. . Sunstone Hotel's financial risk is the risk to Sunstone Hotel stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Sunstone Hotel'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. Sunstone Hotel'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 Sunstone Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Sunstone Hotel's stakeholders.
For most companies, including Sunstone Hotel, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Sunstone Hotel Investors, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Sunstone Hotel's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Sunstone |
Given the importance of Sunstone Hotel's capital structure, the first step in the capital decision process is for the management of Sunstone Hotel to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Sunstone Hotel Investors to issue bonds at a reasonable cost.
| Popular Name | Sunstone Hotel SUNTRUST BK ATLANTA |
| Equity ISIN Code | US8678921011 |
| Bond Issue ISIN Code | US86787GAJ13 |
| S&P Rating | Others |
| Maturity Date | Others |
| Issuance Date | Others |
| Coupon | 3.3 % |
Sunstone Hotel Investors Outstanding Bond Obligations
| US86787XAA37 | US86787XAA37 | Details | |
| SUNTRUST BK ATLANTA | US86787GAJ13 | Details | |
| MPLX LP 52 | US55336VAL45 | Details | |
| US86788LAA89 | US86788LAA89 | Details | |
| US86787EBB20 | US86787EBB20 | Details | |
| Morgan Stanley 3591 | US61744YAK47 | Details |
Understaning Sunstone Hotel Use of Financial Leverage
Sunstone Hotel's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Sunstone Hotel's total debt position, including all outstanding debt obligations, and compares it with Sunstone Hotel's equity. Financial leverage can amplify the potential profits to Sunstone Hotel's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Sunstone Hotel is unable to cover its debt costs.
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust that as of May 6, 2019 has interests in 21 hotels comprised of 10,780 rooms. Sunstones primary business is to acquire, own, asset manage and renovate hotels considered to be Long-Term Relevant Real Estate, the majority of which are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt. SUNSTONE H operates under REIT - Hotel Motel classification in Germany and is traded on Frankfurt Stock Exchange. It employs 48 people. Please read more on our technical analysis page.
Currently Active Assets on Macroaxis
Additional Information and Resources on Investing in Sunstone Stock
When determining whether Sunstone Hotel Investors offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Sunstone Hotel'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 Sunstone Hotel Investors Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Sunstone Hotel Investors Stock:Check out the analysis of Sunstone Hotel Fundamentals Over Time. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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.