Protalix Biotherapeutics Current Financial Leverage
PLX Stock | USD 1.21 0.01 0.83% |
Protalix Biotherapeutics holds a debt-to-equity ratio of 0.0. At this time, Protalix Biotherapeutics' Debt Ratio is fairly stable compared to the past year. Protalix Biotherapeutics' financial risk is the risk to Protalix Biotherapeutics 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).
At this time, Protalix Biotherapeutics' Debt Ratio is fairly stable compared to the past year. Protalix |
Protalix Biotherapeutics Financial Leverage Rating
Protalix Biotherapeutics bond ratings play a critical role in determining how much Protalix Biotherapeutics 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 Protalix Biotherapeutics' borrowing costs.Piotroski F Score | 3 Frail |
Beneish M Score | -1.89 Possible Manipulator |
Protalix Biotherapeutics Debt to Cash Allocation
As Protalix Biotherapeutics follows its natural business cycle, the capital allocation decisions will not magically go away. Protalix Biotherapeutics' 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 has 26.28 M in debt. Protalix Biotherapeutics has a current ratio of 1.3, demonstrating that it may have difficulties to pay its financial commitments when the payables are due. Debt can assist Protalix Biotherapeutics until it has trouble settling it off, either with new capital or with free cash flow. So, Protalix Biotherapeutics' 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 Protalix Biotherapeutics sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Protalix to invest in growth at high rates of return. When we think about Protalix Biotherapeutics' use of debt, we should always consider it together with cash and equity.Protalix Biotherapeutics Total Assets Over Time
Protalix Biotherapeutics 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 Protalix Biotherapeutics' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Protalix Biotherapeutics, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Protalix Biotherapeutics debt ratio should be compared their industry average or other competing firms.Protalix Net Debt
Net Debt |
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Understaning Protalix Biotherapeutics Use of Financial Leverage
Protalix Biotherapeutics financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Protalix Biotherapeutics'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 Protalix Biotherapeutics assets, the company is considered highly leveraged. Understanding the composition and structure of overall Protalix Biotherapeutics 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 Protalix Biotherapeutics' 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 Protalix Biotherapeutics' 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 | 2.6 M | 2.8 M | |
Short and Long Term Debt Total | 26.3 M | 51 M | |
Short Term Debt | 21.7 M | 16.5 M | |
Long Term Debt | 25.4 M | 28.8 M | |
Short and Long Term Debt | 18.2 M | 34.9 M | |
Long Term Debt Total | 25.4 M | 28.3 M | |
Net Debt To EBITDA | 0.23 | 0.22 | |
Debt To Equity | 0.78 | 0.82 | |
Interest Debt Per Share | 0.44 | 0.41 | |
Debt To Assets | 0.31 | 0.45 | |
Long Term Debt To Capitalization | 0.12 | 0.20 | |
Total Debt To Capitalization | 0.44 | 0.46 | |
Debt Equity Ratio | 0.78 | 0.82 | |
Debt Ratio | 0.31 | 0.45 | |
Cash Flow To Debt Ratio | (0.05) | (0.05) |
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 Protalix Biotherapeutics 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, Protalix Biotherapeutics' short interest history, or implied volatility extrapolated from Protalix Biotherapeutics options trading.
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Check out the analysis of Protalix Biotherapeutics Fundamentals Over Time. For more information on how to buy Protalix Stock please use our How to Invest in Protalix Biotherapeutics guide.You can also try the AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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Is Protalix Biotherapeutics' 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 Protalix Biotherapeutics. If investors know Protalix 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 Protalix Biotherapeutics 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 (0.39) | Earnings Share 0.09 | Revenue Per Share 0.97 | Quarterly Revenue Growth 0.217 | Return On Assets 0.0933 |
The market value of Protalix Biotherapeutics is measured differently than its book value, which is the value of Protalix that is recorded on the company's balance sheet. Investors also form their own opinion of Protalix Biotherapeutics' value that differs from its market value or its book value, called intrinsic value, which is Protalix Biotherapeutics' 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 Protalix Biotherapeutics' market value can be influenced by many factors that don't directly affect Protalix Biotherapeutics' 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 Protalix Biotherapeutics' value and its price as these two are different measures arrived at by different means. Investors typically determine if Protalix Biotherapeutics is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Protalix Biotherapeutics' 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.