AMTD IDEA Group Corporate Bonds and Leverage Analysis
| AMTD Stock | USD 1.69 0.13 7.14% |
AMTD IDEA Group holds a debt-to-equity ratio of 0.018. At present, AMTD IDEA's Short and Long Term Debt is projected to decrease significantly based on the last few years of reporting. AMTD IDEA's financial risk is the risk to AMTD IDEA 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
AMTD IDEA'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. AMTD IDEA'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 AMTD Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect AMTD IDEA's stakeholders.
For most companies, including AMTD IDEA, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running AMTD IDEA Group 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 0.1056 | Book Value 128.138 | Operating Margin 0.8171 | Profit Margin 0.8713 | Return On Assets 0.1119 |
AMTD |
Given the importance of AMTD IDEA's capital structure, the first step in the capital decision process is for the management of AMTD IDEA 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 AMTD IDEA Group to issue bonds at a reasonable cost.
AMTD IDEA Financial Leverage Rating
AMTD IDEA Group bond ratings play a critical role in determining how much AMTD IDEA 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 AMTD IDEA's borrowing costs.| Piotroski F Score | 5 Healthy |
| Beneish M Score | -1.33 Possible Manipulator |
AMTD IDEA Group Debt to Cash Allocation
As AMTD IDEA Group follows its natural business cycle, the capital allocation decisions will not magically go away. AMTD IDEA'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 currently holds 160.48 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the company is not taking enough advantage from borrowing. AMTD IDEA Group has a current ratio of 8.88, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist AMTD IDEA until it has trouble settling it off, either with new capital or with free cash flow. So, AMTD IDEA'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 AMTD IDEA Group sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for AMTD to invest in growth at high rates of return. When we think about AMTD IDEA's use of debt, we should always consider it together with cash and equity.AMTD IDEA Total Assets Over Time
AMTD IDEA 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 AMTD IDEA's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of AMTD IDEA, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a an AMTD IDEA debt ratio should be compared their industry average or other competing firms.AMTD Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning AMTD IDEA Use of Financial Leverage
AMTD IDEA financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures AMTD IDEA'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 AMTD IDEA assets, the company is considered highly leveraged. Understanding the composition and structure of overall AMTD IDEA 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 AMTD IDEA'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 AMTD IDEA'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 | 184.6 M | 175.3 M | |
| Net Debt | -826.1 M | -784.8 M | |
| Short Term Debt | 180.4 M | 263.4 M | |
| Short and Long Term Debt | 141.2 M | 226.8 M | |
| Long Term Debt | 3.2 M | 3.1 M | |
| Net Debt To EBITDA | (0.68) | (0.65) | |
| Debt To Equity | 0.02 | 0.02 | |
| Interest Debt Per Share | 1.09 | 1.03 | |
| Debt To Assets | 0.02 | 0.02 | |
| Long Term Debt To Capitalization | 0.0005 | 0.0005 | |
| Total Debt To Capitalization | 0.02 | 0.02 | |
| Debt Equity Ratio | 0.02 | 0.02 | |
| Debt Ratio | 0.02 | 0.02 | |
| Cash Flow To Debt Ratio | 1.17 | 0.66 |
Pair Trading with AMTD IDEA
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 AMTD IDEA 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 AMTD IDEA will appreciate offsetting losses from the drop in the long position's value.The ability to find closely correlated positions to AMTD IDEA could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace AMTD IDEA when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back AMTD IDEA - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling AMTD IDEA Group to buy it.
The correlation of AMTD IDEA is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as AMTD IDEA moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if AMTD IDEA Group moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for AMTD IDEA can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of AMTD IDEA Fundamentals Over Time. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Complementary Tools for AMTD Stock analysis
When running AMTD IDEA's price analysis, check to measure AMTD IDEA'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 AMTD IDEA is operating at the current time. Most of AMTD IDEA's value examination focuses on studying past and present price action to predict the probability of AMTD IDEA's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move AMTD IDEA's price. Additionally, you may evaluate how the addition of AMTD IDEA to your portfolios can decrease your overall portfolio volatility.
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Is AMTD IDEA'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 AMTD IDEA. If investors know AMTD 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 AMTD IDEA 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 (0.49) | Earnings Share 2.97 | Revenue Per Share 27.353 | Quarterly Revenue Growth 1.192 | Return On Assets 0.1119 |
The market value of AMTD IDEA Group is measured differently than its book value, which is the value of AMTD that is recorded on the company's balance sheet. Investors also form their own opinion of AMTD IDEA's value that differs from its market value or its book value, called intrinsic value, which is AMTD IDEA'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 AMTD IDEA's market value can be influenced by many factors that don't directly affect AMTD IDEA'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 AMTD IDEA's value and its price as these two are different measures arrived at by different means. Investors typically determine if AMTD IDEA is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, AMTD IDEA'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.