NeogamesSA Current Debt

NGMSDelisted Stock  USD 29.45  0.00  0.00%   
NeogamesSA holds a debt-to-equity ratio of 1.481. NeogamesSA's financial risk is the risk to NeogamesSA stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

NeogamesSA'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. NeogamesSA'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 NeogamesSA Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect NeogamesSA's stakeholders.
For most companies, including NeogamesSA, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running NeogamesSA 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.
Given that NeogamesSA'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 NeogamesSA 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 NeogamesSA to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, NeogamesSA is said to be less leveraged. If creditors hold a majority of NeogamesSA's assets, the Company is said to be highly leveraged.
  
Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population.

NeogamesSA Financial Leverage Rating

NeogamesSA bond ratings play a critical role in determining how much NeogamesSA 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 NeogamesSA's borrowing costs.

NeogamesSA Debt to Cash Allocation

As NeogamesSA follows its natural business cycle, the capital allocation decisions will not magically go away. NeogamesSA'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 226.8 M in liabilities with Debt to Equity (D/E) ratio of 1.48, which is about average as compared to similar companies. NeogamesSA has a current ratio of 0.96, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist NeogamesSA until it has trouble settling it off, either with new capital or with free cash flow. So, NeogamesSA'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 NeogamesSA sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for NeogamesSA to invest in growth at high rates of return. When we think about NeogamesSA's use of debt, we should always consider it together with cash and equity.

NeogamesSA 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 NeogamesSA's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of NeogamesSA, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a NeogamesSA debt ratio should be compared their industry average or other competing firms.

Understaning NeogamesSA Use of Financial Leverage

NeogamesSA financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures NeogamesSA'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 NeogamesSA assets, the company is considered highly leveraged. Understanding the composition and structure of overall NeogamesSA 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 NeogamesSA'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 NeogamesSA'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).
The company offers various technology platforms, a range of value-added services, and a game studio that provides a portfolio of draw based games and instant tickets through personal computers, smartphones, and handheld devices. The company was incorporated in 2014 and is headquartered in Tel Aviv, Israel. Neogames operates under Gambling classification in the United States and is traded on NASDAQ Exchange. It employs 154 people.
Please read more on our technical analysis page.

Pair Trading with NeogamesSA

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 NeogamesSA 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 NeogamesSA will appreciate offsetting losses from the drop in the long position's value.

Moving together with NeogamesSA Stock

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Moving against NeogamesSA Stock

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The ability to find closely correlated positions to NeogamesSA could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace NeogamesSA 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 NeogamesSA - 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 NeogamesSA to buy it.
The correlation of NeogamesSA 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 NeogamesSA moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if NeogamesSA 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 NeogamesSA 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.
Pair CorrelationCorrelation Matching
Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in population.
You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Consideration for investing in NeogamesSA Stock

If you are still planning to invest in NeogamesSA check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the NeogamesSA's history and understand the potential risks before investing.
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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.
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.