Taking a look at a recent 8-K filing, we can gather a surface level understanding of where the company might be headed. Revenues increased 4% to $29.3 billion for the full 2016 year. Turner’s subscription revenues increased 12% to $5.9 billion and operating income grew 10% to $7.5 billion for the full 2016 year. Lastly, earnings per share for the 2016 fiscal year grew 8% to $4.94 and adjusted earnings per share grew 23% to $5.86. These are healthy numbers for the year, but let us take a look at the chat and see if the market agrees.
Taking a look at the monthly time frame, we can see that price is breaking to new highs, which would indicate the market believes that company has more to go. The chart looks healthy and there has not been any large jump around in price in recent time. Looking at the chart, there are no red flags, but be sure to use technical and fundamental analysis together to formulate a well-rounded opinion.
How important is Time Warner's Liquidity
Time Warner
financial leverage refers to using borrowed capital as a funding source to finance Time Warner ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Time Warner financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Time Warner'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 Time Warner'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). Please check the
breakdown between Time Warner's total debt and its cash.
Another Outlook On Time Warner
Risks
For a full list of risks, go ahead and take a look at the latest 10-K report as that will have detailed information. For now, here are a couple risks to keep in mind while you’re completing your research. First, the company has to have the ability to adjust to the ever changing market and what people want to consume. If they fail to do so, they will lose market share and in the end that will hurt investors in the company. Secondly, with the advancements in technology and how people consume information, the company has to stay on top of the latest and greatest, otherwise people might consumer their content using a competitors method.
Conclusion
Having these types of companies in your portfolio can certainly add a level of diversification, but there is also a level risk as this method of information consumption is changing and evolving. Be sure to compare all the companies that are out there and if after that you still have questions, consult an investing professional and they can point you in the right direction. Lastly, use ratios in your research and this can help provide information on which company is providing the best value.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Time Warner. Please refer to our
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