GATX Corp Current Financial Leverage

GATX -  USA Stock  

USD 97.30  0.17  0.17%

GATX Corp'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. GATX Corp's financial risk is the risk to GATX Corp 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 check the analysis of GATX Corp Fundamentals Over Time.

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GATX Corp Issuance Repayment of Debt Securities is fairly stable at the moment as compared to the past year. GATX Corp reported Issuance Repayment of Debt Securities of 492.9 Million in 2020. Long Term Debt to Equity is likely to rise to 3.08 in 2021, whereas Total Debt is likely to drop slightly above 5.5 B in 2021.

GATX Corp Quarterly Debt to Equity Ratio

4.059Share
Given the importance of GATX Corp's capital structure, the first step in the capital decision process is for the management of GATX Corp 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 GATX Corp to issue bonds at a reasonable cost.

GATX Corp Financial Leverage Rating

GATX Corp bond ratings play a critical role in determining how much GATX Corp 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 GATX Corp's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
8  Strong
Beneish M Score

GATX Corp Debt to Cash Allocation

As GATX Corp follows its natural business cycle, the capital allocation decisions will not magically go away. GATX Corp'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 6.72 B in liabilities with Debt to Equity (D/E) ratio of 3.43, implying the company greatly relies on financing operations through barrowing. GATX Corp has a current ratio of 5.76, suggesting that it is liquid enough and is able to pay its financial obligations when due.

GATX Corp Receivables Over Time

GATX Corp Assets Financed by Debt

The debt-to-assets ratio shows the degree to which GATX Corp 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.

GATX Corp Debt Ratio

    
  62.33   
It appears slightly above 37% of GATX Corp'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 GATX Corp's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of GATX Corp, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a GATX Corp debt ratio should be compared their industry average or other competing firms.
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GATX Corp Historical Liabilities

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

Understaning GATX Corp Use of Financial Leverage

GATX Corp financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures GATX Corp'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 GATX Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall GATX Corp 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 Debt5.7 B5.5 B
Issuance Repayment of Debt Securities492.9 M531.8 M
Long Term Debt to Equity 2.74  3.08 
Debt to Equity Ratio 3.57  3.49 
GATX Corporation strives to be recognized as the finest railcar leasing company in the world by our customers, our shareholders, our employees and the communities where we operate. GATX has been headquartered in Chicago, Illinois since its founding in 1898. GATX Corp operates under Rental Leasing Services classification in the United States and is traded on New York Stock Exchange. It employs 1904 people.

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Please check the analysis of GATX Corp Fundamentals Over Time. Note that the GATX Corp information on this page should be used as a complementary analysis to other GATX Corp'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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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The market value of GATX Corp is measured differently than its book value, which is the value of GATX Corp that is recorded on the company's balance sheet. Investors also form their own opinion of GATX Corp stock's value that differs from its market value or its book value, called intrinsic value, which is GATX Corp'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 GATX Corp's market value can be influenced by many factors that don't directly affect GATX Corp 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 GATX Corp's stock value and its price as these two are different measures arrived at by different means. Investors typically determine GATX Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, GATX Corp's stock 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.