LuxUrban Hotels Current Debt
| LUXHP Stock | 20.00 0.09 0.45% |
LuxUrban Hotels 1300 holds a debt-to-equity ratio of 0.0. As of 05/16/2024, Short and Long Term Debt is likely to grow to about 4.5 M, while Net Debt is likely to drop slightly above 3.3 M. LuxUrban Hotels' financial risk is the risk to LuxUrban Hotels stockholders that is caused by an increase in debt.
Given that LuxUrban Hotels' 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 LuxUrban Hotels 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 LuxUrban Hotels to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, LuxUrban Hotels is said to be less leveraged. If creditors hold a majority of LuxUrban Hotels' assets, the Company is said to be highly leveraged.
As of 05/16/2024, Short and Long Term Debt is likely to grow to about 4.5 M, while Net Debt is likely to drop slightly above 3.3 M. LuxUrban |
LuxUrban Hotels Financial Leverage Rating
LuxUrban Hotels 1300 bond ratings play a critical role in determining how much LuxUrban Hotels 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 LuxUrban Hotels' borrowing costs.LuxUrban Hotels Total Assets Over Time
LuxUrban Hotels 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 LuxUrban Hotels' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of LuxUrban Hotels, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a LuxUrban Hotels debt ratio should be compared their industry average or other competing firms.LuxUrban Net Debt
Net Debt |
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Understaning LuxUrban Hotels Use of Financial Leverage
LuxUrban Hotels financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures LuxUrban Hotels'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 LuxUrban Hotels assets, the company is considered highly leveraged. Understanding the composition and structure of overall LuxUrban Hotels 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 LuxUrban Hotels' 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 LuxUrban Hotels' 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 Next Year | ||
| Net Debt | 3.5 M | 3.3 M | |
| Long Term Debt | 1.5 M | 1.4 M | |
| Short and Long Term Debt | 2.8 M | 4.5 M |
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Try AI Portfolio ArchitectCheck out the analysis of LuxUrban Hotels Fundamentals Over Time. To learn how to invest in LuxUrban Stock, please use our How to Invest in LuxUrban Hotels guide.Note that the LuxUrban Hotels 1300 information on this page should be used as a complementary analysis to other LuxUrban Hotels' 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Complementary Tools for LuxUrban Stock analysis
When running LuxUrban Hotels' price analysis, check to measure LuxUrban Hotels' 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 LuxUrban Hotels is operating at the current time. Most of LuxUrban Hotels' value examination focuses on studying past and present price action to predict the probability of LuxUrban Hotels' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move LuxUrban Hotels' price. Additionally, you may evaluate how the addition of LuxUrban Hotels to your portfolios can decrease your overall portfolio volatility.
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Is LuxUrban Hotels' 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 LuxUrban Hotels. If investors know LuxUrban 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 LuxUrban Hotels listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Dividend Share 0.86 | Revenue Per Share 2.936 | Quarterly Revenue Growth 1.696 | Return On Assets 0.0361 | Return On Equity (2.51) |
The market value of LuxUrban Hotels 1300 is measured differently than its book value, which is the value of LuxUrban that is recorded on the company's balance sheet. Investors also form their own opinion of LuxUrban Hotels' value that differs from its market value or its book value, called intrinsic value, which is LuxUrban Hotels' 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 LuxUrban Hotels' market value can be influenced by many factors that don't directly affect LuxUrban Hotels' 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 LuxUrban Hotels' value and its price as these two are different measures arrived at by different means. Investors typically determine if LuxUrban Hotels is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, LuxUrban Hotels' 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.