Willis Lease Debt
| WLFC Stock | USD 218.07 5.93 2.80% |
Willis Lease Finance has over 1.8 Billion in debt which may indicate that it relies heavily on debt financing. At present, Willis Lease's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short Term Debt is expected to grow to about 80.4 M, whereas Long Term Debt is forecasted to decline to about 905.2 M. With a high degree of financial leverage come high-interest payments, which usually reduce Willis Lease's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Willis Lease'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. Willis Lease'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 Willis Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Willis Lease's stakeholders.
Willis Lease Quarterly Net Debt |
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For most companies, including Willis Lease, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Willis Lease Finance, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Willis Lease'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 2.7813 | Book Value 72.212 | Operating Margin 0.4321 | Profit Margin 0.1893 | Return On Assets 0.0498 |
Given that Willis Lease'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 Willis Lease 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 Willis Lease to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Willis Lease is said to be less leveraged. If creditors hold a majority of Willis Lease's assets, the Company is said to be highly leveraged.
At present, Willis Lease's Liabilities And Stockholders Equity is projected to increase significantly based on the last few years of reporting. The current year's Non Current Liabilities Total is expected to grow to about 2.2 B, whereas Non Current Liabilities Other is forecasted to decline to about 22.6 M. Willis |
Willis Lease Bond Ratings
Willis Lease Finance financial ratings play a critical role in determining how much Willis Lease 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 Willis Lease's borrowing costs.| Piotroski F Score | 9 | Very Strong | View |
| Beneish M Score | (2.49) | Unlikely Manipulator | View |
Willis Lease Finance Debt to Cash Allocation
As Willis Lease Finance follows its natural business cycle, the capital allocation decisions will not magically go away. Willis Lease's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Willis Lease Finance currently holds 1.8 B in liabilities with Debt to Equity (D/E) ratio of 4.08, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Willis Lease Finance has a current ratio of 3.31, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Willis Lease's use of debt, we should always consider it together with its cash and equity.Willis Lease Total Assets Over Time
Willis Lease Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Willis Lease 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.Willis Lease Debt Ratio | 53.0 |
Willis Lease Corporate Bonds Issued
Most Willis bonds can be classified according to their maturity, which is the date when Willis Lease Finance has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Willis Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Willis Lease Use of Financial Leverage
Willis Lease's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Willis Lease's total debt position, including all outstanding debt obligations, and compares it with Willis Lease's equity. Financial leverage can amplify the potential profits to Willis Lease's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Willis Lease is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 1.8 B | 1.9 B | |
| Net Debt | 1.8 B | 1.9 B | |
| Long Term Debt | 1.8 B | 905.2 M | |
| Short Term Debt | 76.5 M | 80.4 M | |
| Long Term Debt Total | 2.1 B | 1.1 B | |
| Short and Long Term Debt | 1.2 B | 1 B | |
| Net Debt To EBITDA | 7.69 | 6.36 | |
| Debt To Equity | 3.55 | 4.43 | |
| Interest Debt Per Share | 287.56 | 301.94 | |
| Debt To Assets | 0.65 | 0.53 | |
| Long Term Debt To Capitalization | 0.78 | 0.63 | |
| Total Debt To Capitalization | 0.78 | 0.63 | |
| Debt Equity Ratio | 3.55 | 4.43 | |
| Debt Ratio | 0.65 | 0.53 | |
| Cash Flow To Debt Ratio | 0.13 | 0.07 |
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.When determining whether Willis Lease Finance offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Willis Lease'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 Willis Lease Finance Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Willis Lease Finance Stock:Check out the analysis of Willis Lease Fundamentals Over Time. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
Is Trading Companies & Distributors 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 Willis Lease. If investors know Willis 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 Willis Lease 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 0.582 | Dividend Share 0.25 | Earnings Share 14.11 | Revenue Per Share 80.335 | Quarterly Revenue Growth 0.378 |
The market value of Willis Lease Finance is measured differently than its book value, which is the value of Willis that is recorded on the company's balance sheet. Investors also form their own opinion of Willis Lease's value that differs from its market value or its book value, called intrinsic value, which is Willis Lease'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 Willis Lease's market value can be influenced by many factors that don't directly affect Willis Lease'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 Willis Lease's value and its price as these two are different measures arrived at by different means. Investors typically determine if Willis Lease is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Willis Lease'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.