BASF SE Current Financial Leverage

BAS -  Germany Stock  

EUR 63.09  2.00  3.07%

BASF SE'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. BASF SE's financial risk is the risk to BASF SE 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).
Continue to the analysis of BASF SE Fundamentals Over Time.

Search Bonds 

 
Refresh

BASF SE Current Financial Burden

BASF SE'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. BASF SE'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 BASF SE Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect BASF SE's stakeholders.

Asset vs Debt

Equity vs Debt

For most companies, including BASF SE, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running BASF SE NA 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.
Given the importance of BASF SE's capital structure, the first step in the capital decision process is for the management of BASF SE 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 BASF SE NA to issue bonds at a reasonable cost.

BASF SE Financial Leverage Rating

BASF SE NA bond ratings play a critical role in determining how much BASF SE 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 BASF SE's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A

BASF SE NA Debt to Cash Allocation

As BASF SE NA follows its natural business cycle, the capital allocation decisions will not magically go away. BASF SE'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 accumulated 20.3 B in total debt with debt to equity ratio (D/E) of 0.52, which is about average as compared to similar companies. BASF SE NA has a current ratio of 1.77, which is within standard range for the sector.

BASF SE 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 BASF SE's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of BASF SE, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a BASF SE debt ratio should be compared their industry average or other competing firms.

Understaning BASF SE Use of Financial Leverage

BASF SE financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures BASF SE'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 BASF SE assets, the company is considered highly leveraged. Understanding the composition and structure of overall BASF SE 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.
It operates through six segments Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition Care, and Agricultural Solutions. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany. BASF SE operates under Chemicals classification in Germany and is traded on XETRA Stock Exchange. It employs 110261 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in BASF SE without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

Did you try this?

Run Bollinger Bands Now

   

Bollinger Bands

Use Bollinger Bands indicator to analyze target price for a given investing horizon
All  Next Launch Module

Pair Trading with BASF SE

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 BASF SE 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 BASF SE will appreciate offsetting losses from the drop in the long position's value.

BASF SE Pair Correlation

Equities Pair Trading Analysis

Continue to the analysis of BASF SE Fundamentals Over Time. Note that the BASF SE NA information on this page should be used as a complementary analysis to other BASF SE'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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

Other Tools for BASF SE Stock

When running BASF SE NA price analysis, check to measure BASF SE'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 BASF SE is operating at the current time. Most of BASF SE's value examination focuses on studying past and present price action to predict the probability of BASF SE's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move BASF SE's price. Additionally, you may evaluate how the addition of BASF SE to your portfolios can decrease your overall portfolio volatility.
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go