Trican Well Current Debt
TCW Stock | CAD 4.18 0.08 1.95% |
Trican Well Service holds a debt-to-equity ratio of 0.033. As of the 5th of May 2024, Cash Flow To Debt Ratio is likely to grow to 14.38, though Net Debt is likely to grow to (17.2 M). With a high degree of financial leverage come high-interest payments, which usually reduce Trican Well's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Trican Well'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. Trican Well'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 Trican Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Trican Well's stakeholders.
For most companies, including Trican Well, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Trican Well Service the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 1.8568 | Book Value 2.472 | Operating Margin 0.1517 | Profit Margin 0.1244 | Return On Assets 0.1454 |
Trican |
Trican Well Financial Leverage Rating
Trican Well Service bond ratings play a critical role in determining how much Trican Well 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 Trican Well's borrowing costs.Trican Well Service Debt to Cash Allocation
As Trican Well Service follows its natural business cycle, the capital allocation decisions will not magically go away. Trican Well'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. Many companies 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.
The company has accumulated 42.39 M in total debt with debt to equity ratio (D/E) of 0.03, which may suggest the company is not taking enough advantage from borrowing. Trican Well Service has a current ratio of 3.17, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. Debt can assist Trican Well until it has trouble settling it off, either with new capital or with free cash flow. So, Trican Well'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 Trican Well Service sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Trican to invest in growth at high rates of return. When we think about Trican Well's use of debt, we should always consider it together with cash and equity.Trican Well Total Assets Over Time
Trican Well 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 Trican Well's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Trican Well, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Trican Well debt ratio should be compared their industry average or other competing firms.Trican Net Debt
Understaning Trican Well Use of Financial Leverage
Trican Well financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Trican Well's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Trican Well assets, the company is considered highly leveraged. Understanding the composition and structure of overall Trican Well debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Trican Well's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Trican Well's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Last Reported | Projected for Next Year | ||
Net Debt | -18.1 M | -17.2 M | |
Short and Long Term Debt Total | 48.7 M | 46.3 M | |
Short Term Debt | 3.4 M | 3.3 M | |
Long Term Debt | 26.8 M | 25.5 M | |
Short and Long Term Debt | 18.4 M | 17.4 M | |
Long Term Debt Total | 35.5 M | 33.7 M | |
Net Debt To EBITDA | (0.30) | (0.31) | |
Debt To Equity | 0.04 | 0.03 | |
Interest Debt Per Share | 0.1 | 0.09 | |
Debt To Assets | 0.03 | 0.02 | |
Long Term Debt To Capitalization | 0.03 | 0.02 | |
Total Debt To Capitalization | 0.03 | 0.03 | |
Debt Equity Ratio | 0.04 | 0.03 | |
Debt Ratio | 0.03 | 0.02 | |
Cash Flow To Debt Ratio | 13.70 | 14.38 |
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Check out the analysis of Trican Well Fundamentals Over Time. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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When running Trican Well's price analysis, check to measure Trican Well'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 Trican Well is operating at the current time. Most of Trican Well's value examination focuses on studying past and present price action to predict the probability of Trican Well's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Trican Well's price. Additionally, you may evaluate how the addition of Trican Well to your portfolios can decrease your overall portfolio volatility.
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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.