Healthcare Services Current Financial Leverage
| HCSG Stock | USD 10.77 0.07 0.65% |
Healthcare Services' 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. Healthcare Services' financial risk is the risk to Healthcare Services 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).
Healthcare Current Financial Burden
Healthcare Services' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Healthcare Services' 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 Healthcare Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Healthcare Services' stakeholders.
Asset vs Debt
Equity vs Debt
For most companies, including Healthcare Services, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Healthcare Services Group 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.
Price Book 2.3118 | Total Assets 718.3 M | Operating Margin 0.0271 | Profit Margin 0.0226 | Total Current Assets 508.6 M |
Given that Healthcare Services' 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 Healthcare Services 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 Healthcare Services to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Healthcare Services is said to be less leveraged. If creditors hold a majority of Healthcare Services' assets, the company is said to be highly leveraged.
Healthcare Services Debt to Equity Ratio is most likely to increase slightly in the upcoming years. The last year's value of Debt to Equity Ratio was reported at 0.69Healthcare Services Quarterly Debt to Equity Ratio |
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Healthcare |
Healthcare Services Financial Leverage Rating
Healthcare Services Group bond ratings play a critical role in determining how much Healthcare Services 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 Healthcare Services' borrowing costs.| Piotroski F Score | 5 Healthy |
| Beneish M Score | -1.95 Possible Manipulator |
Healthcare Services Debt to Cash Allocation
As Healthcare Services Group follows its natural business cycle, the capital allocation decisions will not magically go away. Healthcare Services' 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 33.1 M in liabilities with Debt to Equity (D/E) ratio of 0.09, which may suggest the company is not taking enough advantage from borrowing. Healthcare Services has a current ratio of 2.76, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Healthcare Services until it has trouble settling it off, either with new capital or with free cash flow. So, Healthcare Services' 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 Healthcare Services sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Healthcare to invest in growth at high rates of return. When we think about Healthcare Services' use of debt, we should always consider it together with cash and equity.Healthcare Services Inventories Over Time
Healthcare Services Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Healthcare Services 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.Healthcare Services Debt Ratio | 3.78 |
Healthcare Services Historical Liabilities
While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Healthcare Services, understanding its historical liability is critical in projecting Healthcare Services' 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 Healthcare Services uses its financing power over time.
In order to fund their growth, businesses such as Healthcare Services widely use Financial Leverage. For most companies, financial capital is raised by issuing debt securities and by selling common stock. The debt and equity that make up Healthcare Services' capital structure have many risks and return implications. Leverage is an investment strategy of using borrowed money to increase the potential return of an investment. Please note, 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.
Understaning Healthcare Services Use of Financial Leverage
Healthcare Services financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Healthcare Services'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 Healthcare Services assets, the company is considered highly leveraged. Understanding the composition and structure of overall Healthcare Services 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 Healthcare Services' 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 Healthcare Services' 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).
| Last Reported | Projected for 2023 | ||
| Total Debt | 33.1 M | 27.4 M | |
| Debt Current | 22.5 M | 22.4 M | |
| Debt Non Current | 8.1 M | 8.7 M | |
| Issuance Repayment of Debt Securities | 22.5 M | 24.3 M | |
| Debt to Equity Ratio | 0.69 | 0.71 |
Healthcare Services Investors Sentiment
The influence of Healthcare Services' 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 Healthcare. 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 market does not have solid backing from leading economists and market statisticians.
Investor biases related to Healthcare Services' public news can be used to forecast risks associated with an investment in Healthcare. The trend in average sentiment can be used to explain how an investor holding Healthcare can time the market purely based on public headlines and social activities around Healthcare Services Group. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Healthcare Services' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Healthcare Services' and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Healthcare Services' news discussions. The higher the estimated score, the more favorable is the investor's outlook on Healthcare Services.
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 Healthcare Services 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, Healthcare Services' short interest history, or implied volatility extrapolated from Healthcare Services options trading.
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Check out the analysis of Healthcare Services Fundamentals Over Time. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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When running Healthcare Services' price analysis, check to measure Healthcare Services' 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 Healthcare Services is operating at the current time. Most of Healthcare Services' value examination focuses on studying past and present price action to predict the probability of Healthcare Services' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Healthcare Services' price. Additionally, you may evaluate how the addition of Healthcare Services to your portfolios can decrease your overall portfolio volatility.
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Is Healthcare Services' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Healthcare Services. If investors know Healthcare will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Healthcare Services listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.283 | Dividend Share 0.215 | Earnings Share 0.52 | Revenue Per Share 22.505 | Quarterly Revenue Growth (0.014) |
The market value of Healthcare Services is measured differently than its book value, which is the value of Healthcare that is recorded on the company's balance sheet. Investors also form their own opinion of Healthcare Services' value that differs from its market value or its book value, called intrinsic value, which is Healthcare Services' 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 Healthcare Services' market value can be influenced by many factors that don't directly affect Healthcare Services' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Healthcare Services' value and its price as these two are different measures arrived at by different means. Investors typically determine if Healthcare Services is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Healthcare Services' 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.
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.