Debt Cash – CTXETG http://ctxetg.com/ Tue, 21 Jun 2022 05:56:08 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://ctxetg.com/wp-content/uploads/2021/06/icon-150x150.png Debt Cash – CTXETG http://ctxetg.com/ 32 32 Grieg Seafood (OB:GSF) could easily take on more debt https://ctxetg.com/grieg-seafood-obgsf-could-easily-take-on-more-debt/ Tue, 21 Jun 2022 05:40:49 +0000 https://ctxetg.com/grieg-seafood-obgsf-could-easily-take-on-more-debt/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. Like many other companies Grieg Seafood ASA (OB:GSF) uses debt. But should shareholders worry about its use of debt?

Why is debt risky?

Debt helps a business until the business struggles to pay it back, either with new capital or with free cash flow. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are mercilessly liquidated by their bankers. However, a more common (but still costly) situation is when a company has to dilute shareholders at a cheap share price just to keep debt under control. Of course, many companies use debt to finance their growth, without any negative consequences. The first thing to do when considering how much debt a business has is to look at its cash and debt together.

See our latest review for Grieg Seafood

What is Grieg Seafood’s net debt?

As you can see below, Grieg Seafood had 3.05 billion kr in debt in March 2022, compared to 4.12 billion kr the previous year. However, he also had 1.71 billion kr in cash, so his net debt is 1.34 billion kr.

OB:GSF Debt to Equity Historical June 21, 2022

How strong is Grieg Seafood’s balance sheet?

According to the latest published balance sheet, Grieg Seafood had liabilities of kr 1.33 billion maturing within 12 months and liabilities of kr 4.77 billion maturing beyond 12 months. On the other hand, it had cash of 1.71 billion kr and 415.8 million kr of receivables due within one year. Thus, its liabilities total kr 3.98 billion more than the combination of its cash and short-term receivables.

While that might sound like a lot, it’s not too bad since Grieg Seafood has a market cap of 15.9 billion kr, so it could probably strengthen its balance sheet by raising capital if needed. However, it is always worth taking a close look at its ability to repay debt.

We use two main ratios to inform us about debt to earnings levels. The first is net debt divided by earnings before interest, taxes, depreciation and amortization (EBITDA), while the second is how often its earnings before interest and taxes (EBIT) covers its interest expense (or its interests, for short). The advantage of this approach is that we consider both the absolute amount of debt (with net debt to EBITDA) and the actual interest expense associated with that debt (with its interest coverage ratio ).

Grieg Seafood has net debt of just 0.70 times EBITDA, indicating that he is certainly not an imprudent borrower. And it has interest coverage of 8.7 times, which is more than enough. Even better, Grieg Seafood increased its EBIT by 343% last year, which is an impressive improvement. If sustained, this growth will make debt even more manageable in years to come. The balance sheet is clearly the area to focus on when analyzing debt. But ultimately, the company’s future profitability will decide whether Grieg Seafood can strengthen its balance sheet over time. So if you are focused on the future, you can check out this free report showing analyst earnings forecast.

Finally, while the taxman may love accounting profits, lenders only accept cash. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years, Grieg Seafood has recorded free cash flow of 97% of its EBIT, which is higher than what we would normally expect. This positions him well to pay off debt if desired.

Our point of view

Fortunately, Grieg Seafood’s impressive EBIT to free cash flow conversion means it has the upper hand on its debt. And this is only the beginning of good news since its EBIT growth rate is also very encouraging. Zooming out, Grieg Seafood appears to be using debt quite sensibly; and that gets the green light from us. Although debt carries risks, when used wisely, it can also generate a higher return on equity. When analyzing debt levels, the balance sheet is the obvious starting point. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example, we have identified 2 warning signs for Grieg Seafood (1 is concerning) that you should be aware of.

In the end, sometimes it’s easier to focus on companies that don’t even need to take on debt. Readers can access a list of growth stocks with no net debt 100% freeat present.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Gujarat Ambuja Exports (NSE:GAEL) could easily take on more debt https://ctxetg.com/gujarat-ambuja-exports-nsegael-could-easily-take-on-more-debt/ Sun, 19 Jun 2022 04:52:59 +0000 https://ctxetg.com/gujarat-ambuja-exports-nsegael-could-easily-take-on-more-debt/ Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to […]]]>

Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. Like many other companies Gujarat Ambuja Exports Limited (NSE:GAEL) uses debt. But the more important question is: what risk does this debt create?

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case, a company can go bankrupt if it cannot pay its creditors. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. Of course, many companies use debt to finance their growth, without any negative consequences. When we think about a company’s use of debt, we first look at cash and debt together.

See our latest analysis for Gujarat Ambuja exports

What is the export debt of Gujarat Ambuja?

As you can see below, at the end of March 2022, Gujarat Ambuja Exports had a debt of ₹2.69 billion, up from ₹1.53 billion a year ago. Click on the image for more details. However, he has ₹6.81 billion in cash to offset this, resulting in a net cash of ₹4.12 billion.

NSEI: GAEL Debt to Equity June 19, 2022

How healthy is Gujarat Ambuja’s export balance sheet?

According to the latest published balance sheet, Gujarat Ambuja Exports had liabilities of ₹5.61 billion due within 12 months and liabilities of ₹733.7 million due beyond 12 months. As compensation for these obligations, it had cash of ₹6.81 billion as well as receivables valued at ₹2.24 billion due within 12 months. It can therefore boast of ₹2.71 billion more liquid assets than total Passives.

This surplus suggests that Gujarat Ambuja Exports has a cautious balance sheet and could probably eliminate its debt without too much difficulty. Simply put, the fact that Gujarat Ambuja Exports has more cash than debt is arguably a good indication that it can safely manage its debt.

On top of that, we are pleased to report that Gujarat Ambuja Exports increased its EBIT by 36%, reducing the specter of future debt repayments. There is no doubt that we learn the most about debt from the balance sheet. But you can’t look at debt in total isolation; since Gujarat Ambuja Exports will need revenue to repay this debt. So, when considering debt, it is definitely worth looking at the earnings trend. Click here for an interactive preview.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. Although Gujarat Ambuja Exports has net cash on its balance sheet, it is still worth looking at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is growing. builds (or erodes) cash balance. Over the past three years, Gujarat Ambuja Exports has recorded free cash flow of 50% of its EBIT, which is about normal given that free cash flow excludes interest and taxes. This cold hard cash allows him to reduce his debt whenever he wants.

Summary

While we sympathize with investors who find debt a concern, you should bear in mind that Gujarat Ambuja Exports has a net cash position of ₹4.12 billion, as well as more liquid assets than liabilities. And we liked the look of EBIT growth of 36% YoY last year. We therefore do not believe that the use of debt by Gujarat Ambuja Exports is risky. When analyzing debt levels, the balance sheet is the obvious starting point. But at the end of the day, every business can contain risks that exist outside of the balance sheet. These risks can be difficult to spot. Every business has them, and we’ve spotted 1 warning sign for Gujarat Ambuja Exports you should know.

In the end, it’s often best to focus on companies that aren’t in debt. You can access our special list of these companies (all with a track record of earnings growth). It’s free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Did EPR Properties (NYSE:EPR) use debt to achieve its 5.3% ROE? https://ctxetg.com/did-epr-properties-nyseepr-use-debt-to-achieve-its-5-3-roe/ Fri, 17 Jun 2022 13:08:27 +0000 https://ctxetg.com/did-epr-properties-nyseepr-use-debt-to-achieve-its-5-3-roe/ Many investors are still learning the different metrics that can be helpful when analyzing a stock. This article is for those who want to know more about return on equity (ROE). To keep the lesson grounded in practicality, we’ll use ROE to better understand EPR (NYSE:EPR) properties. Return on equity or ROE is a key […]]]>

Many investors are still learning the different metrics that can be helpful when analyzing a stock. This article is for those who want to know more about return on equity (ROE). To keep the lesson grounded in practicality, we’ll use ROE to better understand EPR (NYSE:EPR) properties.

Return on equity or ROE is a key metric used to gauge how effectively a company’s management is using the company’s capital. In simple terms, it is used to assess the profitability of a company in relation to its equity.

Check out our latest analysis for EPR Properties

How do you calculate return on equity?

Return on equity can be calculated using the formula:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the above formula, the ROE for EPR Properties is:

5.3% = $137 million ÷ $2.6 billion (based on trailing 12 months to March 2022).

“Yield” refers to a company’s earnings over the past year. This therefore means that for every $1 of investment by its shareholder, the company generates a profit of $0.05.

Does EPR Properties have a good return on equity?

A simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industrial classification. The image below shows that EPR Properties has an ROE that is roughly in line with the REIT industry average (6.5%).

NYSE: EPR Return on Equity June 17, 2022

It’s not surprising, but it’s respectable. Although the ROE is similar to that of the industry, we still need to perform further checks to see if the company’s ROE is being boosted by high debt levels. If so, this increases its exposure to financial risk. To learn about the 3 risks we have identified for EPR Properties, visit our risk dashboard for free.

What is the impact of debt on ROE?

Most businesses need money – from somewhere – to increase their profits. The money for the investment can come from the previous year’s earnings (retained earnings), from issuing new shares or from borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the use of debt will improve returns, but will not change equity. In this way, the use of debt will increase ROE, even though the core economics of the business remains the same.

Combine EPR Properties’ debt and its return on equity of 5.3%

It is worth noting the heavy use of debt by EPR Properties, leading to its debt-to-equity ratio of 1.08. Its ROE is quite low, even with the use of significant debt; this is not a good result, in our view. Debt increases risk and reduces options for the business in the future, so you generally want to see good returns using it.

Conclusion

Return on equity is a useful indicator of a company’s ability to generate profits and return them to shareholders. A company that can earn a high return on equity without going into debt could be considered a high quality company. If two companies have roughly the same level of debt and one has a higher ROE, I generally prefer the one with a higher ROE.

But ROE is only one piece of a larger puzzle, as high-quality companies often trade on high earnings multiples. It is important to consider other factors, such as future earnings growth and the amount of investment needed in the future. You might want to take a look at this data-rich interactive chart of the company’s forecast.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Netflix Knocked Squid Game To Become A Reality Series With Huge Prize Money https://ctxetg.com/netflix-knocked-squid-game-to-become-a-reality-series-with-huge-prize-money/ Tue, 14 Jun 2022 20:19:00 +0000 https://ctxetg.com/netflix-knocked-squid-game-to-become-a-reality-series-with-huge-prize-money/ It’s being promoted as the “greatest reality competition of all time” as Netflix prepares to turn its hit show “Squid Game” into a reality series based on the scary fictional competition where gamers risk their lives so that a winner can repay their crippling debt. obligations. The announcement was made during the Banff World Media […]]]>

It’s being promoted as the “greatest reality competition of all time” as Netflix prepares to turn its hit show “Squid Game” into a reality series based on the scary fictional competition where gamers risk their lives so that a winner can repay their crippling debt. obligations.

The announcement was made during the Banff World Media Festival. tuesday. The show, titled “Squid Game: The Challenge,” will feature 456 gamers all competing for a chance to win $4.56 million. According to Netflix, this is the largest amount of money in television history to be given away as prizes. As the Hollywood journalist noted, the “X-Factor” on Fox gave the winners a $5 million recording contract.

Netflix has released a promotional video of what the show might look like, but hasn’t announced what games are planned, The Verge reported.

Brandon Riegg, Vice President of Unscripted Series and Documentaries at Netflix said, while thanking the show’s original creator, Hwang Dong-hyuk, “We are grateful for his support as we transform the fictional world into reality in this massive competition and social experiment.”

Riegg said: “Fans of the drama series will experience a fascinating and unpredictable journey as our 456 real-world contestants navigate the greatest competition series of all time, full of tension and twists and turns, with the biggest prize money never realized at the end.”

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Atalaya Mining (LON:ATYM) could easily take on more debt https://ctxetg.com/atalaya-mining-lonatym-could-easily-take-on-more-debt/ Mon, 13 Jun 2022 05:06:45 +0000 https://ctxetg.com/atalaya-mining-lonatym-could-easily-take-on-more-debt/ Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. […]]]>

Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Like many other companies Atalaya Mining Plc (LON:ATYM) uses debt. But should shareholders worry about its use of debt?

What risk does debt carry?

Generally speaking, debt only becomes a real problem when a company cannot easily repay it, either by raising capital or with its own cash flow. If things go really bad, lenders can take over the business. However, a more frequent (but still costly) event is when a company has to issue shares at bargain prices, permanently diluting shareholders, just to shore up its balance sheet. That said, the most common situation is when a company manages its debt reasonably well – and to its own benefit. When we look at debt levels, we first consider cash and debt levels, together.

See our latest analysis for Atalaya Mining

What is Atalaya Mining’s debt?

You can click on the chart below for historical figures, but it shows Atalaya Mining had €41.6 million in debt in March 2022, up from €53.0 million a year prior. However, he has €128.5m in cash which offsets this, leading to a net cash of €86.9m.

OBJECTIVE: ATYM Debt to equity June 13, 2022

How strong is Atalaya Mining’s balance sheet?

According to the last published balance sheet, Atalaya Mining had liabilities of 87.6 million euros maturing within 12 months and liabilities of 69.0 million euros maturing beyond 12 months. In return for these obligations, it had cash of €128.5 million as well as receivables worth €37.1 million at less than 12 months. It can therefore claim 9.06 million euros more in cash than total Passives.

Considering the size of Atalaya Mining, it appears its cash is well balanced with its total liabilities. So while it’s hard to imagine the €546.4m company struggling for cash, we still think it’s worth keeping an eye on its balance sheet. In short, Atalaya Mining has clean cash, so it’s fair to say that they don’t have a lot of debt!

Even more impressively, Atalaya Mining increased its EBIT by 102% year-over-year. If sustained, this growth will make debt even more manageable in years to come. The balance sheet is clearly the area to focus on when analyzing debt. But ultimately, the company’s future profitability will decide whether Atalaya Mining can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Finally, a company can only repay its debts with cold hard cash, not with book profits. Although Atalaya Mining has net cash on its balance sheet, it’s still worth looking at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it’s building (or erodes) that treasury. balance. Over the past three years, Atalaya Mining has recorded free cash flow of 61% of its EBIT, which is about normal, given that free cash flow excludes interest and taxes. This cold hard cash allows him to reduce his debt whenever he wants.

Summary

If it’s always a good idea to investigate a company’s debt, in this case Atalaya Mining has 86.9 million euros in net cash and a decent balance sheet. And we liked the look of EBIT growth of 102% YoY last year. We therefore do not believe that Atalaya Mining’s use of debt is risky. When analyzing debt levels, the balance sheet is the obvious starting point. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example – Atalaya Mining has 1 warning sign we think you should know.

In the end, it’s often best to focus on companies that aren’t in debt. You can access our special list of these companies (all with a track record of earnings growth). It’s free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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What is good debt and how is it useful? https://ctxetg.com/what-is-good-debt-and-how-is-it-useful/ Sat, 11 Jun 2022 03:54:24 +0000 https://ctxetg.com/what-is-good-debt-and-how-is-it-useful/ There is reason to argue that having no debt is better than having a lot of debt. However, many people can only afford to buy important items like a house by borrowing money and going into debt. While these types of loans are normally justifiable and provide value to the borrower, there is another end […]]]>

There is reason to argue that having no debt is better than having a lot of debt. However, many people can only afford to buy important items like a house by borrowing money and going into debt. While these types of loans are normally justifiable and provide value to the borrower, there is another end of the spectrum when debt is incurred irresponsibly. While it is simple to distinguish between these two extremes, it is more difficult to judge other debts.

Let’s first try to understand what good debt is.

The classic saying “it takes money to make money” is often represented by good debt. If the debt you take on helps you earn money and increase your net worth, it’s a win-win situation. Debt that improves your life and your family’s life in other important ways is also acceptable.

How can good debt help? Let’s take a few examples to understand this.

Education

In general, the higher the level of education, the greater the earning potential. Education also has a positive impact on the ability to find work. Workers with a higher level of education are more likely to hold well-paying positions and have an easier time finding new ones if the need arises.

A few years into the workforce, a college or technical degree can often pay for itself. However, not all degrees are created equal, so it is important to think about the short and long term implications of any subject of study that interests you.

READ MORE: How much debt is actually too much debt?

Money for your business growth

Borrowing money to start your own business falls into the category of good debt. It is generally satisfying both financially and psychologically to be your employer. It can also be extremely stressful.

Starting a business, like paying for education, is risky. Many businesses fail, but choosing an area in which you are enthusiastic and skilled increases your chances of success.

For your home or to earn real estate

There are many methods to profit from real estate. Residentially, the simplest approach is to take out a mortgage to buy a property, live in it for a few decades, and then resell it for a profit. Meanwhile, you have the independence that comes with owning a home, plus a variety of potential tax benefits that aren’t available to renters.

READ MORE: 5 ways to avoid getting into debt

Commercial real estate can be a source of cash flow and ultimate capital gain if you know what you’re doing, while residential real estate can be used to generate income by renting it out.

Debt is not always easy to categorize as positive or negative. It is often determined by your financial situation as well as other variables. Certain types of debt can be beneficial for some people but harmful for others.

Therefore, it is necessary to understand and analyze the different aspects and reasons for which debt is used and the uses that will be made of it.

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10 ways to reduce the cost of student loans and other debt https://ctxetg.com/10-ways-to-reduce-the-cost-of-student-loans-and-other-debt/ Wed, 08 Jun 2022 20:56:27 +0000 https://ctxetg.com/10-ways-to-reduce-the-cost-of-student-loans-and-other-debt/ Looking at many different lenders and comparing terms can help you find the best rate. Make more than the minimum payment each month and try to make additional payments if possible. If you are looking for a student loan, prioritize federal options before getting a private loan. Loading Something is loading. If you need to […]]]>
  • Looking at many different lenders and comparing terms can help you find the best rate.
  • Make more than the minimum payment each month and try to make additional payments if possible.
  • If you are looking for a student loan, prioritize federal options before getting a private loan.

If you need to borrow money to pay for something like your car or your education, you want to make sure the debt is as affordable as possible.

Whether you’re looking to lower the cost of your student, personal, auto, or any other type of loan, we’ve got 10 key tips to make sure you’re paying the lowest amount possible.

1. Shop around and compare offers

You can check the rates that many different lenders will offer you by completing simple online applications which should only take a few minutes and won’t affect your


credit score

. You can also use a loan market to compare several offers at once with a single app.

Taking the time to consider a range of options pays off. A study by SuperMoney.com to analyse 160,000 loan offers to over 15,000 borrowers and found that the average difference between the highest and lowest APR offer for the same borrower was 7.1 percentage points.

“Just accepting the first loan offer you qualify for can be a costly mistake,” says Andrew Latham, CFP® professional and editor of SuperMoney.com. “Data suggests that comparing multiple lenders can save you more money than raising your credit score by 100 points when it comes to finding the best APR.”

2. Pay early and often

If you have the financial flexibility to make additional or prepayments on your loan, you should. The more additional payments you make for your loan, the faster the balance will decrease and the less interest you will pay overall.

Most lenders don’t charge any penalties for prepaying your loan, and you can shorten your loan term by months or even years with regular extra payments.

3. Make more than the minimum payment each month

Making the minimum payment each month probably won’t do much to reduce your overall debt, since most of your money will go to paying off interest first, especially on high-interest loans. Making higher monthly payments will reduce your debt more aggressively and leave less room for interest to rise.

However, if you have a choice between making the minimum payment or doing nothing at all, pay the minimum. This way you will keep your credit score in good shape.

4. Consider a variable rate loan

Variable rates change periodically throughout the term of your loan and they usually start lower than fixed rate loans. Although you run the risk of your loan rate increasing during its term, you may also benefit from a rate drop.

Paying off your loan quickly enough can negate the fixed rate aspect of a fixed loan, as you will benefit from a lower rate to start with.

5. Refinance your loan

If your credit score, income, or overall financial situation has improved since you first took out your loan, you may want to consider refinancing to take advantage of more favorable terms. This could include a better rate, more accessible customer service, and a different term.

However, be very careful before refinancing federal student loans, as you will lose key protections in the process. For example, you would not be eligible for the COVID-19 student loan payment pause.

6. Pay bonuses, tax refunds or gift money on your debt

While putting extra money into your debt might not sound like the most exciting idea (and you should definitely save some of it to do something good for yourself), an unexpected windfall can boost your ability to pay off your debt quickly.

You’re not always able to predict how much money you’ll receive, but if you have an idea (say your company offers annual vacation bonuses of $1,000) you can budget a certain portion to pay off your debt. . The exact percentage you allocate doesn’t matter, because every little bit counts.

7. Sign up for automatic payments

Many lenders offer discounts to borrowers who sign up for automatic payments. While a 0.25% or 0.50% discount may not seem like much, the reduced rate adds up in the long run.

Plus, signing up for automatic payments ensures that you won’t miss any payments, which will hurt your credit score and could disqualify you from future loans.

8. Choose a shorter duration

When deciding on the terms of your loan, you will usually have the choice between a shorter and a longer term. This varies by loan type, and we’ve listed the general timelines below:

  • Student loans — 5 to 20 years
  • Auto loans — one to seven years
  • Personal loans — 1 to 12 years

If you choose a shorter term, your monthly payments will be higher, but you’ll pay less interest overall, saving you on the total cost of the loan.

9. Prioritize federal options for student loans

Federal student loan options often have lower rates and better protections than private loans, so they are a good option for reducing overall loan costs. Federal student loan relief programs like Public Service Loan Forgiveness can help you get all of your debt forgiven if you work in the public sector and make qualifying monthly payments for 120 months.

To avoid student loans altogether, see what federal assistance you qualify for in the form of grants, scholarships, and work-study, which don’t have to be repaid.

10. Don’t let interest capitalize on your loan

Capitalized interest is unpaid interest added to your loan balance after periods of non-payment, including forbearance, deferment, and after your grace period. This will increase your overall loan balance and you will later pay interest on this higher amount, which will increase the total cost of your loan.

Although loan forbearance can help you get back on your feet if you are in financial difficulty, keep in mind that interest will usually continue to accrue. So the longer you wait to start repaying the loan, the more it will cost you in the end.

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Does Mesoblast (ASX:MSB) have a healthy balance sheet? https://ctxetg.com/does-mesoblast-asxmsb-have-a-healthy-balance-sheet/ Mon, 06 Jun 2022 21:48:36 +0000 https://ctxetg.com/does-mesoblast-asxmsb-have-a-healthy-balance-sheet/ Warren Buffett said: “Volatility is far from synonymous with risk. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We note that Mesoblast Limited (ASX:MSB) has debt on its balance sheet. But the more important question is: what risk does this […]]]>

Warren Buffett said: “Volatility is far from synonymous with risk. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We note that Mesoblast Limited (ASX:MSB) has debt on its balance sheet. But the more important question is: what risk does this debt create?

What risk does debt carry?

Debt helps a business until the business struggles to pay it back, either with new capital or with free cash flow. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. However, a more common (but still costly) situation is when a company has to dilute shareholders at a cheap share price just to keep debt under control. Of course, debt can be an important tool in businesses, especially capital-intensive businesses. When we think about a company’s use of debt, we first look at cash and debt together.

See our latest review for Mesoblast

What is Mesoblast’s debt?

As you can see below, Mesoblast had $94.2 million in debt as of March 2022, roughly the same as the previous year. You can click on the graph for more details. However, he has $76.8 million in cash to offset this, resulting in a net debt of approximately $17.4 million.

ASX: MSB Debt to Equity History June 6, 2022

How strong is Mesoblast’s balance sheet?

The latest balance sheet data shows that Mesoblast had liabilities of $52.2 million due within the year, and liabilities of $112.4 million due thereafter. On the other hand, it had a cash position of 76.8 million dollars and 5.16 million dollars of receivables at less than one year. It therefore has liabilities totaling $82.6 million more than its cash and short-term receivables, combined.

This shortfall is not that bad as Mesoblast is worth US$398.6 million and therefore could probably raise enough capital to shore up its balance sheet, should the need arise. But it is clear that it must be carefully examined whether he can manage his debt without dilution. When analyzing debt levels, the balance sheet is the obvious starting point. But ultimately, the company’s future profitability will decide whether Mesoblast can strengthen its balance sheet over time. So if you are focused on the future, you can check out this free report showing analyst earnings forecast.

Last year, Mesoblast was not profitable in terms of EBIT, but managed to increase its turnover by 62%, to $10.0 million. With a little luck, the company will be able to progress towards profitability.

Caveat Emptor

While we can certainly appreciate Mesoblast’s revenue growth, its earnings before interest and tax (EBIT) loss is less than ideal. Its EBIT loss was US$80 million. When we look at this and recall the liabilities on its balance sheet, versus cash, it seems unwise to us that the company has liabilities. So we think its balance sheet is a little stretched, but not beyond repair. However, it doesn’t help that he’s burned through $77 million in cash in the past year. So suffice it to say that we consider the stock to be very risky. The balance sheet is clearly the area to focus on when analyzing debt. However, not all investment risks reside on the balance sheet, far from it. To this end, you should be aware of the 2 warning signs we spotted with Mesoblast.

If you are interested in investing in businesses that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Is Yong Tai Berhad (KLSE: YONGTAI) weighed down by his debt? https://ctxetg.com/is-yong-tai-berhad-klse-yongtai-weighed-down-by-his-debt/ Sun, 05 Jun 2022 00:41:35 +0000 https://ctxetg.com/is-yong-tai-berhad-klse-yongtai-weighed-down-by-his-debt/ David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. […]]]>

David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. We can see that Yong Tai Berhad (KLSE: YONGTAI) uses debt in his business. But does this debt worry shareholders?

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are mercilessly liquidated by their bankers. However, a more frequent (but still costly) event is when a company has to issue shares at bargain prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. When we think about a company’s use of debt, we first look at cash and debt together.

See our latest review for Yong Tai Berhad

What is Yong Tai Berhad’s debt?

As you can see below, Yong Tai Berhad had a debt of RM193.2 million in March 2022, about the same as the previous year. You can click on the graph for more details. And he doesn’t have a lot of cash, so his net debt is about the same.

KLSE: YONGTAI Debt to Equity June 5, 2022

How strong is Yong Tai Berhad’s balance sheet?

Zooming in on the latest balance sheet data, we can see that Yong Tai Berhad had liabilities of RM349.0 million due within 12 months and liabilities of RM149.5 million due beyond. In return, he had RM478.0k in cash and RM109.6m in receivables due within 12 months. It therefore has liabilities totaling RM388.4 million more than its cash and short-term receivables, combined.

This deficit casts a shadow over the RM125.4m company, like a towering colossus of mere mortals. So we definitely think shareholders need to watch this one closely. After all, Yong Tai Berhad would likely need a major recapitalization if it were to pay its creditors today. When analyzing debt levels, the balance sheet is the obvious starting point. But it is Yong Tai Berhad’s earnings that will influence the balance sheet going forward. So, when considering debt, it is definitely worth looking at the earnings trend. Click here for an interactive preview.

Over 12 months, Yong Tai Berhad recorded a loss in EBIT and saw its revenue drop to RM57 million, a decline of 27%. To be honest, that doesn’t bode well.

Caveat Emptor

Not only has Yong Tai Berhad’s revenue dropped over the past twelve months, it has also produced negative earnings before interest and taxes (EBIT). Indeed, it lost a very considerable RM15 million in EBIT. Combining this information with the significant liabilities we have already discussed makes us very hesitant about this stock, to say the least. That said, it is possible that the company will change course. Still, we wouldn’t bet on it considering he’s vaped RM11m in cash in the last twelve months and doesn’t have much cash. We therefore consider this to be a high-risk action and would not be at all surprised if the company were to ask shareholders for money before long. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example, we found 5 warning signs for Yong Tai Berhad (2 cannot be ignored!) that you should be aware of before investing here.

If you are interested in investing in businesses that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Crown Electrokinetics CEO updates shareholders on the latest https://ctxetg.com/crown-electrokinetics-ceo-updates-shareholders-on-the-latest/ Fri, 03 Jun 2022 12:30:00 +0000 https://ctxetg.com/crown-electrokinetics-ceo-updates-shareholders-on-the-latest/ Los Angeles, California, June 3, 2022 (GLOBE NEWSWIRE) — Crown Electrokinetics Corp. (NASDAQ: RCDR) (“Crown” or the “Company”), a leading smart glass technology company, today issued a letter to shareholders with an update on the recently announced term sheet of debt financing and an update on its current and future production line. Shareholder updates from […]]]>

Los Angeles, California, June 3, 2022 (GLOBE NEWSWIRE) — Crown Electrokinetics Corp. (NASDAQ: RCDR) (“Crown” or the “Company”), a leading smart glass technology company, today issued a letter to shareholders with an update on the recently announced term sheet of debt financing and an update on its current and future production line. Shareholder updates from CEO Doug Croxall are included in full below.

Dear shareholders:

I am pleased to share great news for Crown and for its shareholders. Last week, we signed a non-binding debt financing term sheet and expect to complete customary due diligence and final agreements within the next two months. This credit facility is particularly important as it will allow us to complete the planned production lines, have sufficient working capital until the end of 2023 and begin the delivery and installation of Smart Windows Inserts™ in our clients.

Use of proceeds from Non-binding term sheet for loan capital

At the end of May, we signed a non-binding term sheet for debt capital. The final agreement is expected to be finalized within the next two months.

Closing this term sheet will allow us to wrap up two key events. The first is to build our two roll-to-roll lines specifically designed for the production of Crown’s DynamicTint™ film and the second is to increase our available cash to fund ongoing working capital requirements.

Status of production facilities

This week, some shareholders asked me to explain the difference between our current production line and the future lines that we will build. For the benefit of all our shareholders, I will describe the differences and the planned evolution of the product.

Crown is currently producing DynamicTint™ film on our prototype production facility at our Corvallis facility. We will produce our film in this facility in limited quantities. This method allowed us to test our production processes as well as to develop our generation 1.0 Smart Windows Insert™. Our Corvallis production line will produce 6 inch and 12 inch strips of our DynamicTint™ film for application in our Generation 1.0 Smart Window Insert™.

Initially, our Smart Windows Inserts™ are expected to be produced in limited series to meet orders from our first customers, including Metro Spaces, Hudson Pacific and Brandywine Realty Trust. Together, these three clients have a total of 281 buildings.

With customer feedback on the performance, design and use of our first generation insert, we will develop our second generation Smart Window Insert™. We then plan to transfer production to our two new roll-to-roll production lines capable of manufacturing films ranging from 12 inches to 72 inches in width.

We estimate that these significantly expanded manufacturing facilities could begin to generate revenues of between $220 million and $240 million, with an estimated EBITDA of approximately $40 million on an annualized basis.

Thank you all for your trust and support and I look forward to providing further updates as we approach product delivery later this summer.

Sincerely,

Doug Croxall
President and CEO

About Crown Electrokinetics

Crown is a smart glass technology company and the creator of DynamicTint™ We Make Your Glass Smarter™. Originally invented by Hewlett-Packard (HP, Inc.), our technology allows any glass surface to change from clear to dark in seconds. With applications on a wide range of windows, including commercial buildings, automotive sunroofs, and residential skylights, we partner with leading glass and film manufacturers for mass production and distribution. At the heart of our technology is a thin film powered by an electrically charged pigment that not only replaces common window tints, but is also a more durable alternative to traditional window treatments. With its unique ability to adapt to existing glass, DynamicTint™ offers a myriad of carbon-reducing benefits. The company is backed by a strong patent portfolio.

Safe Harbor Statement: The statements contained in this press release may be “forward-looking statements”. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or other statements regarding our future business or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could and do differ materially from what is expressed or anticipated in the forward-looking statements due to numerous factors. All forward-looking statements speak only as of the date of this press release, and Crown Electrokinetic Corporation undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.

This press release does not constitute a public offer to sell securities. Any privately offered securities will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Electrokinetic crown

IR Email: info@crownek.com

Source: Crown Electrokinetics: www.crownek.com

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