Vulcan Minerals Debt

VUL Stock  CAD 0.12  0.00  0.00%   
Vulcan Minerals holds a debt-to-equity ratio of 0.003. At this time, Vulcan Minerals' Short Term Debt is fairly stable compared to the past year. Net Debt To EBITDA is likely to climb to 10.41 in 2024, whereas Short and Long Term Debt Total is likely to drop slightly above 31.8 K in 2024. . Vulcan Minerals' financial risk is the risk to Vulcan Minerals stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Vulcan Minerals' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Vulcan Minerals' 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 Vulcan Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Vulcan Minerals' stakeholders.
For most companies, including Vulcan Minerals, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Vulcan Minerals, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Vulcan Minerals' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
0.3632
Book Value
0.339
Operating Margin
(0.14)
Return On Assets
(0.01)
Return On Equity
(0.06)
Given that Vulcan Minerals' 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 Vulcan Minerals 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 Vulcan Minerals to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Vulcan Minerals is said to be less leveraged. If creditors hold a majority of Vulcan Minerals' assets, the Company is said to be highly leveraged.
Total Current Liabilities is likely to climb to about 219.6 K in 2024. Liabilities And Stockholders Equity is likely to climb to about 49.8 M in 2024
  
Check out the analysis of Vulcan Minerals Fundamentals Over Time.

Vulcan Minerals Debt to Cash Allocation

Many companies such as Vulcan Minerals, 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.
Vulcan Minerals has accumulated 30 K in total debt with debt to equity ratio (D/E) of 0.0, which may suggest the company is not taking enough advantage from borrowing. Vulcan Minerals has a current ratio of 22.61, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Vulcan Minerals until it has trouble settling it off, either with new capital or with free cash flow. So, Vulcan Minerals' 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 Vulcan Minerals sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Vulcan to invest in growth at high rates of return. When we think about Vulcan Minerals' use of debt, we should always consider it together with cash and equity.

Vulcan Minerals Total Assets Over Time

Vulcan Minerals Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Vulcan Minerals 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.

Vulcan Minerals Debt Ratio

    
  0.0601   
It appears most of the Vulcan Minerals' assets are financed through equity. 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 Vulcan Minerals' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Vulcan Minerals, which in turn will lower the firm's financial flexibility.

Vulcan Minerals Corporate Bonds Issued

Vulcan Net Debt

Net Debt

(4.2 Million)

Vulcan Minerals reported Net Debt of (4.42 Million) in 2023

Understaning Vulcan Minerals Use of Financial Leverage

Understanding the structure of Vulcan Minerals' debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Vulcan Minerals' 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 ReportedProjected for Next Year
Net Debt-4.4 M-4.2 M
Short Term Debt34.5 K36.2 K
Short and Long Term Debt Total34.5 K31.8 K
Long Term Debt34.5 K31.4 K
Short and Long Term Debt27 K24 K
Net Debt To EBITDA 9.92  10.41 
Cash Flow To Debt Ratio(6.33)(6.65)
Please read more on our technical analysis page.

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Additional Tools for Vulcan Stock Analysis

When running Vulcan Minerals' price analysis, check to measure Vulcan Minerals' 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 Vulcan Minerals is operating at the current time. Most of Vulcan Minerals' value examination focuses on studying past and present price action to predict the probability of Vulcan Minerals' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Vulcan Minerals' price. Additionally, you may evaluate how the addition of Vulcan Minerals 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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.