Catalent Debt

CTLT Stock  USD 60.71  0.25  0.41%   
Catalent holds a debt-to-equity ratio of 0.897. At this time, Catalent's Cash Flow To Debt Ratio is comparatively stable compared to the past year. . Catalent's financial risk is the risk to Catalent stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

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

Catalent Quarterly Net Debt

4.7 Billion

For most companies, including Catalent, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Catalent, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Catalent's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
3.0694
Book Value
19.912
Operating Margin
0.0915
Profit Margin
(0.24)
Return On Assets
0.0004
Given that Catalent'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 Catalent 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 Catalent to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Catalent is said to be less leveraged. If creditors hold a majority of Catalent's assets, the Company is said to be highly leveraged.
Total Current Liabilities is likely to drop to about 804.6 M in 2024. Liabilities And Stockholders Equity is likely to drop to about 6.6 B in 2024
  
Check out the analysis of Catalent Fundamentals Over Time.
For more information on how to buy Catalent Stock please use our How to Invest in Catalent guide.

Catalent Bond Ratings

Catalent financial ratings play a critical role in determining how much Catalent 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 Catalent's borrowing costs.
Piotroski F Score
7
StrongView
Beneish M Score
(2.24)
Unlikely ManipulatorView

Catalent Debt to Cash Allocation

Catalent currently holds 4.99 B in liabilities with Debt to Equity (D/E) ratio of 0.9, which is about average as compared to similar companies. Catalent has a current ratio of 2.8, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Catalent's use of debt, we should always consider it together with its cash and equity.

Catalent Common Stock Shares Outstanding Over Time

Catalent Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Catalent 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.

Catalent Debt Ratio

    
  64.0   
It appears slightly above 36% of Catalent's assets are financed be 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 Catalent's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Catalent, which in turn will lower the firm's financial flexibility.

Catalent Corporate Bonds Issued

Catalent Short Long Term Debt Total

Short Long Term Debt Total

3.38 Billion

At this time, Catalent's Short and Long Term Debt Total is comparatively stable compared to the past year.

Understaning Catalent Use of Financial Leverage

Catalent's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Catalent's current equity. If creditors own a majority of Catalent's assets, the company is considered highly leveraged. Understanding the composition and structure of Catalent's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Short and Long Term Debt TotalB3.4 B
Net Debt4.7 BB
Long Term Debt4.9 B3.3 B
Short Term Debt61 M93.4 M
Long Term Debt Total4.8 B3.1 B
Short and Long Term Debt48 M45.6 M
Net Debt To EBITDA 7.41  8.81 
Debt To Equity 1.28  1.34 
Interest Debt Per Share 26.85  17.62 
Debt To Assets 0.47  0.64 
Long Term Debt To Capitalization 0.56  0.80 
Total Debt To Capitalization 0.56  0.81 
Debt Equity Ratio 1.28  1.34 
Debt Ratio 0.47  0.64 
Cash Flow To Debt Ratio 0.06  0.07 
Please read more on our technical analysis page.

Thematic Opportunities

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Additional Tools for Catalent Stock Analysis

When running Catalent's price analysis, check to measure Catalent'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 Catalent is operating at the current time. Most of Catalent's value examination focuses on studying past and present price action to predict the probability of Catalent's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Catalent's price. Additionally, you may evaluate how the addition of Catalent to your portfolios can decrease your overall portfolio volatility.

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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.