Tortoise Energy Current Financial Leverage
| TYG Stock | USD 31.33 0.83 2.72% |
Tortoise Energy Infr holds a debt-to-equity ratio of 0.294. At this time, Tortoise Energy's Long Term Debt To Capitalization is most likely to slightly decrease in the upcoming years. The Tortoise Energy's current Total Debt To Capitalization is estimated to increase to 0.29, while Net Debt is projected to decrease to roughly 78.8 M. Tortoise Energy's financial risk is the risk to Tortoise Energy stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Tortoise Energy'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. Tortoise Energy'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 Tortoise Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Tortoise Energy's stakeholders.
Tortoise Energy Quarterly Net Debt |
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For most companies, including Tortoise Energy, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Tortoise Energy Infrastructure 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 0.8666 | Book Value 35.346 | Operating Margin 0.4696 | Profit Margin (0.99) | Return On Assets 0.0096 |
Given that Tortoise Energy'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 Tortoise Energy 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 Tortoise Energy to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Tortoise Energy is said to be less leveraged. If creditors hold a majority of Tortoise Energy's assets, the Company is said to be highly leveraged.
At this time, Tortoise Energy's Long Term Debt To Capitalization is most likely to slightly decrease in the upcoming years. The Tortoise Energy's current Total Debt To Capitalization is estimated to increase to 0.29, while Net Debt is projected to decrease to roughly 78.8 M. Tortoise |
Tortoise Energy Financial Leverage Rating
Tortoise Energy Infrastructure bond ratings play a critical role in determining how much Tortoise Energy 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 Tortoise Energy's borrowing costs.| Piotroski F Score | 5 Healthy |
| Beneish M Score | -4.1 Unlikely Manipulator |
Tortoise Energy Infr Debt to Cash Allocation
As Tortoise Energy Infrastructure follows its natural business cycle, the capital allocation decisions will not magically go away. Tortoise Energy'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 72.1 M in debt with debt to equity (D/E) ratio of 0.29, which may show that the company is not taking advantage of profits from borrowing. Tortoise Energy Infr has a current ratio of 0.07, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Debt can assist Tortoise Energy until it has trouble settling it off, either with new capital or with free cash flow. So, Tortoise Energy'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 Tortoise Energy Infr sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Tortoise to invest in growth at high rates of return. When we think about Tortoise Energy's use of debt, we should always consider it together with cash and equity.Tortoise Energy Total Assets Over Time
Tortoise Energy 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 Tortoise Energy's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Tortoise Energy, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Tortoise Energy debt ratio should be compared their industry average or other competing firms.Tortoise Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Tortoise Energy Use of Financial Leverage
Tortoise Energy financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Tortoise Energy'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 Tortoise Energy assets, the company is considered highly leveraged. Understanding the composition and structure of overall Tortoise Energy 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 Tortoise Energy'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 Tortoise Energy'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 | ||
| Short and Long Term Debt Total | 82.9 M | 78.8 M | |
| Net Debt | 82.9 M | 78.8 M | |
| Long Term Debt | 155.6 M | 147.8 M | |
| Short and Long Term Debt | 13.6 M | 12.9 M | |
| Short Term Debt | 17.4 M | 16.5 M | |
| Long Term Debt Total | 121.7 M | 115.7 M | |
| Net Debt To EBITDA | (5.31) | (5.04) | |
| Debt To Equity | 0.17 | 0.28 | |
| Interest Debt Per Share | 6.36 | 6.04 | |
| Debt To Assets | 0.17 | 0.24 | |
| Long Term Debt To Capitalization | 0.14 | 0.20 | |
| Total Debt To Capitalization | 0.18 | 0.29 | |
| Debt Equity Ratio | 0.17 | 0.28 | |
| Debt Ratio | 0.17 | 0.24 | |
| Cash Flow To Debt Ratio | 1.13 | 1.19 |
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When determining whether Tortoise Energy Infr is a strong investment it is important to analyze Tortoise Energy's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Tortoise Energy's future performance. For an informed investment choice regarding Tortoise Stock, refer to the following important reports:Check out the analysis of Tortoise Energy Fundamentals Over Time. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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When running Tortoise Energy's price analysis, check to measure Tortoise Energy'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 Tortoise Energy is operating at the current time. Most of Tortoise Energy's value examination focuses on studying past and present price action to predict the probability of Tortoise Energy's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Tortoise Energy's price. Additionally, you may evaluate how the addition of Tortoise Energy to your portfolios can decrease your overall portfolio volatility.
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Is Tortoise Energy's industry 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 Tortoise Energy. If investors know Tortoise 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 Tortoise Energy 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 1.097 | Dividend Share 2.84 | Earnings Share (1.22) | Revenue Per Share 1.464 | Quarterly Revenue Growth 0.213 |
The market value of Tortoise Energy Infr is measured differently than its book value, which is the value of Tortoise that is recorded on the company's balance sheet. Investors also form their own opinion of Tortoise Energy's value that differs from its market value or its book value, called intrinsic value, which is Tortoise Energy'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 Tortoise Energy's market value can be influenced by many factors that don't directly affect Tortoise Energy'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 Tortoise Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if Tortoise Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Tortoise Energy'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.