Astec Inds Current Financial Leverage

ASTE -  USA Stock  

USD 59.40  0.58  0.97%

Astec Inds' 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. Astec Inds' financial risk is the risk to Astec Inds 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 Astec Inds Fundamentals Over Time.

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The current year Total Debt is expected to grow to about 2.4 M. The current year Debt Current is expected to grow to about 2 M

Astec Current Financial Burden

Astec Inds' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Astec Inds' 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 Astec Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Astec Inds' stakeholders.

Asset vs Debt

Equity vs Debt

Given that Astec Inds' 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 Astec Inds 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 Astec Inds to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Astec Inds is said to be less leveraged. If creditors hold a majority of Astec Inds' assets, the company is said to be highly leveraged.

Astec Inds Quarterly Debt to Equity Ratio

0.342Share
Given the importance of Astec Inds' capital structure, the first step in the capital decision process is for the management of Astec Inds 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 Astec Inds to issue bonds at a reasonable cost.

Astec Inds Financial Leverage Rating

Astec Inds bond ratings play a critical role in determining how much Astec Inds 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 Astec Inds' borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
4  Poor
Beneish M Score

Astec Inds Debt to Cash Allocation

As Astec Inds follows its natural business cycle, the capital allocation decisions will not magically go away. Astec Inds' 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 1.7 M in liabilities with Debt to Equity (D/E) ratio of 0.0, which may suggest the company is not taking enough advantage from borrowing. Astec Inds has a current ratio of 3.14, suggesting that it is liquid enough and is able to pay its financial obligations when due.

Astec Inds Inventories Over Time

Astec Inds Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Astec Inds 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.

Astec Inds Debt Ratio

    
  0.26   
It looks as if most of the Astec Inds' assets are financed through equity. 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 Astec Inds' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Astec Inds, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an Astec Inds debt ratio should be compared their industry average or other competing firms.
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Astec Inds Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Astec Inds, understanding its historical liability is critical in projecting Astec Inds' 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 Astec Inds uses its financing power over time.

Understaning Astec Inds Use of Financial Leverage

Astec Inds financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Astec Inds'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 Astec Inds assets, the company is considered highly leveraged. Understanding the composition and structure of overall Astec Inds 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.
Please read more on our technical analysis page.
Last ReportedProjected for 2021
Total Debt2.3 M2.4 M
Debt Current1.6 MM
Debt Non Current400 K410.5 K
Issuance Repayment of Debt Securities100 K102.6 K
Long Term Debt to Equity 0.000623  0.000639 
Debt to Equity Ratio 0.32  0.36 
Astec Industries, Inc. designs, engineers, manufactures, and markets equipment and components used primarily in road building and related construction activities in the United States and internationally. Astec Industries, Inc. was founded in 1972 and is based in Chattanooga, Tennessee. Astec Inds operates under Farm Heavy Construction Machinery classification in the United States and is traded on NASDAQ Exchange. It employs 3537 people.

Astec Inds Investors Sentiment

The influence of Astec Inds' 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 Astec. 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 - ASTE

Astec Inds Investor Sentiment

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

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 Astec Inds 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 Astec Inds will appreciate offsetting losses from the drop in the long position's value.

Astec Inds Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for Astec Inds and Deere Company. 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
Run Pair Correlation  
Please continue to the analysis of Astec Inds Fundamentals Over Time. Note that the Astec Inds information on this page should be used as a complementary analysis to other Astec Inds' 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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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When running Astec Inds price analysis, check to measure Astec Inds' 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 Astec Inds is operating at the current time. Most of Astec Inds' value examination focuses on studying past and present price action to predict the probability of Astec Inds' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Astec Inds' price. Additionally, you may evaluate how the addition of Astec Inds to your portfolios can decrease your overall portfolio volatility.
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The market value of Astec Inds is measured differently than its book value, which is the value of Astec that is recorded on the company's balance sheet. Investors also form their own opinion of Astec Inds' value that differs from its market value or its book value, called intrinsic value, which is Astec Inds' 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 Astec Inds' market value can be influenced by many factors that don't directly affect Astec Inds 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 Astec Inds' value and its price as these two are different measures arrived at by different means. Investors typically determine Astec Inds value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Astec Inds' 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.