AeroCentury Corp Current Financial Leverage

ACY -  USA Stock  

USD 36.08  1.33  3.83%

AeroCentury Corp's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. AeroCentury Corp's financial risk is the risk to AeroCentury Corp 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).
Please continue to the analysis of AeroCentury Corp Fundamentals Over Time.

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Total Debt is likely to rise to about 105.6 M in 2021, whereas Issuance Repayment of Debt Securities is likely to drop (19.9 M) in 2021.
Given that AeroCentury Corp'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 AeroCentury Corp 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 AeroCentury Corp to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, AeroCentury Corp is said to be less leveraged. If creditors hold a majority of AeroCentury Corp's assets, the company is said to be highly leveraged.

AeroCentury Corp Quarterly Debt to Equity Ratio

(3.237)Share
Given the importance of AeroCentury Corp's capital structure, the first step in the capital decision process is for the management of AeroCentury Corp to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of AeroCentury Corp to issue bonds at a reasonable cost.

AeroCentury Corp Financial Leverage Rating

AeroCentury Corp bond ratings play a critical role in determining how much AeroCentury Corp 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 AeroCentury Corp's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
6  Healthy
Beneish M Score

AeroCentury Corp Debt to Cash Allocation

As AeroCentury Corp follows its natural business cycle, the capital allocation decisions will not magically go away. AeroCentury Corp'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 77.29 M in debt. AeroCentury Corp has a current ratio of 7.53, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due.

AeroCentury Corp Total Assets Over Time

AeroCentury Corp Assets Financed by Debt

The debt-to-assets ratio shows the degree to which AeroCentury Corp 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.

AeroCentury Corp Debt Ratio

    
  110.2   
It appears most of the AeroCentury Corp's assets are financed through 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 AeroCentury Corp's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of AeroCentury Corp, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an AeroCentury Corp debt ratio should be compared their industry average or other competing firms.
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AeroCentury Corp Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of AeroCentury Corp, understanding its historical liability is critical in projecting AeroCentury Corp's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how AeroCentury Corp uses its financing power over time.

Understaning AeroCentury Corp Use of Financial Leverage

AeroCentury Corp financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures AeroCentury Corp'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 AeroCentury Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall AeroCentury Corp 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.
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Last ReportedProjected for 2021
Total Debt89 M105.6 M
Issuance Repayment of Debt Securities-19.4 M-19.9 M
Debt to Equity Ratio(6.30) (6.47) 
AeroCentury Corp., together with its subsidiaries, provides leasing and finance services to regional airlines worldwide. On March 29, 2021, AeroCentury Corp., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. AeroCentury Corp operates under Rental Leasing Services classification in the United States and is traded on NYSEMKT Exchange. It employs 8 people.

AeroCentury Corp Investors Sentiment

The influence of AeroCentury Corp's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in AeroCentury. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Current Sentiment - ACY

AeroCentury Corp Investor Sentiment

Greater number of Macroaxis users are presently bullish on AeroCentury Corp. What is your sentiment towards investing in AeroCentury Corp? Are you bullish or bearish?
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98% Bullish
2% Bearish
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Pair Trading with AeroCentury Corp

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if AeroCentury Corp position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AeroCentury Corp will appreciate offsetting losses from the drop in the long position's value.

AeroCentury Corp Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for AeroCentury Corp and Avis Budget Group. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Please continue to the analysis of AeroCentury Corp Fundamentals Over Time. Note that the AeroCentury Corp information on this page should be used as a complementary analysis to other AeroCentury Corp's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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The market value of AeroCentury Corp is measured differently than its book value, which is the value of AeroCentury that is recorded on the company's balance sheet. Investors also form their own opinion of AeroCentury Corp's value that differs from its market value or its book value, called intrinsic value, which is AeroCentury Corp'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 AeroCentury Corp's market value can be influenced by many factors that don't directly affect AeroCentury Corp underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between AeroCentury Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine AeroCentury Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, AeroCentury Corp'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.