Commercial International Current Financial Leverage
| CIBEY Stock | USD 1.67 0.01 0.60% |
Commercial International holds a debt-to-equity ratio of 0.0. Commercial International's financial risk is the risk to Commercial International 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).
Given that Commercial International's debt-to-equity ratio measures a OTC Stock's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Commercial International 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 Commercial International to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Commercial International is said to be less leveraged. If creditors hold a majority of Commercial International's assets, the OTC Stock is said to be highly leveraged.
Commercial |
Commercial International Financial Leverage Rating
Commercial International Bank bond ratings play a critical role in determining how much Commercial International 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 Commercial International's borrowing costs.Commercial International Debt to Cash Allocation
As Commercial International Bank follows its natural business cycle, the capital allocation decisions will not magically go away. Commercial International'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 212.1 M in total debt. Debt can assist Commercial International until it has trouble settling it off, either with new capital or with free cash flow. So, Commercial International'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 Commercial International sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Commercial to invest in growth at high rates of return. When we think about Commercial International's use of debt, we should always consider it together with cash and equity.Commercial International 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 Commercial International's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Commercial International, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Commercial International debt ratio should be compared their industry average or other competing firms.Understaning Commercial International Use of Financial Leverage
Commercial International financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Commercial International'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 Commercial International assets, the company is considered highly leveraged. Understanding the composition and structure of overall Commercial International 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 Commercial International'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 Commercial International'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).
Commercial International Bank S.A.E provides retail, corporate, and investment banking services in Egypt. Commercial International Bank S.A.E was founded in 1975 and is headquartered in Giza, Egypt. Commercial Intl is traded on OTC Exchange in the United States. Please read more on our technical analysis page.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Commercial International in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Commercial International's short interest history, or implied volatility extrapolated from Commercial International options trading.
Pair Trading with Commercial International
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 Commercial International 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 Commercial International will appreciate offsetting losses from the drop in the long position's value.Moving together with Commercial OTC Stock
| 0.62 | CIHKY | China Merchants Bank Normal Trading | PairCorr |
| 0.84 | CIHHF | China Merchants Bank | PairCorr |
Moving against Commercial OTC Stock
| 0.54 | INTC | Intel Earnings Call This Week | PairCorr |
The ability to find closely correlated positions to Commercial International could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Commercial International 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 Commercial International - 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 Commercial International Bank to buy it.
The correlation of Commercial International 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 Commercial International moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Commercial International 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 Commercial International 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 Commercial International Fundamentals Over Time. Note that the Commercial International information on this page should be used as a complementary analysis to other Commercial International'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 the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Complementary Tools for Commercial OTC Stock analysis
When running Commercial International's price analysis, check to measure Commercial International'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 Commercial International is operating at the current time. Most of Commercial International's value examination focuses on studying past and present price action to predict the probability of Commercial International's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Commercial International's price. Additionally, you may evaluate how the addition of Commercial International to your portfolios can decrease your overall portfolio volatility.
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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.