Papa Johns Bonds
PZZA Stock | USD 64.41 0.15 0.23% |
Papa Johns International holds a debt-to-equity ratio of 0.0. At present, Papa Johns' Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt is expected to grow to about 971.4 M, whereas Short Term Debt is forecasted to decline to about 25.2 M. Papa Johns' financial risk is the risk to Papa Johns 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 present, Papa Johns' Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt is expected to grow to about 971.4 M, whereas Short Term Debt is forecasted to decline to about 25.2 M. Papa |
Papa Johns Bond Ratings
Papa Johns International bond ratings play a critical role in determining how much Papa Johns 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 Papa Johns' borrowing costs.Piotroski F Score | 6 Healthy |
Beneish M Score | -1.72 Possible Manipulator |
Papa Johns International Debt to Cash Allocation
As Papa Johns International follows its natural business cycle, the capital allocation decisions will not magically go away. Papa Johns' 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 965.72 M in liabilities. Papa Johns International has a current ratio of 0.89, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Papa Johns until it has trouble settling it off, either with new capital or with free cash flow. So, Papa Johns' 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 Papa Johns International sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Papa to invest in growth at high rates of return. When we think about Papa Johns' use of debt, we should always consider it together with cash and equity.Papa Johns Total Assets Over Time
Papa Johns 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 Papa Johns' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Papa Johns, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Papa Johns debt ratio should be compared their industry average or other competing firms.Papa Johns Corporate Bonds Issued
Papa Johns issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Papa Johns International uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Papa bonds can be classified according to their maturity, which is the date when Papa Johns International has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Papa Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Papa Johns Use of Financial Leverage
Papa Johns financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Papa Johns'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 Papa Johns assets, the company is considered highly leveraged. Understanding the composition and structure of overall Papa Johns 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 Papa Johns' 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 Papa Johns' 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 | ||
Short and Long Term Debt Total | 965.7 M | 1 B | |
Net Debt | 925.1 M | 971.4 M | |
Short Term Debt | 33.1 M | 25.2 M | |
Long Term Debt | 757.4 M | 795.3 M | |
Long Term Debt Total | 686.6 M | 351.7 M | |
Short and Long Term Debt | 18 M | 17.1 M | |
Net Debt To EBITDA | 3.93 | 4.13 | |
Debt To Equity | (1.55) | (1.47) | |
Interest Debt Per Share | 22.83 | 23.97 | |
Debt To Assets | 0.75 | 0.78 | |
Long Term Debt To Capitalization | 2.28 | 2.40 | |
Total Debt To Capitalization | 2.15 | 2.25 | |
Debt Equity Ratio | (1.55) | (1.47) | |
Debt Ratio | 0.75 | 0.78 | |
Cash Flow To Debt Ratio | 0.28 | 0.27 |
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Check out the analysis of Papa Johns Fundamentals Over Time. Note that the Papa Johns International information on this page should be used as a complementary analysis to other Papa Johns' 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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When running Papa Johns' price analysis, check to measure Papa Johns' 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 Papa Johns is operating at the current time. Most of Papa Johns' value examination focuses on studying past and present price action to predict the probability of Papa Johns' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Papa Johns' price. Additionally, you may evaluate how the addition of Papa Johns to your portfolios can decrease your overall portfolio volatility.
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Is Papa Johns' 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 Papa Johns. If investors know Papa 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 Papa Johns 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 0.205 | Dividend Share 1.76 | Earnings Share 2.48 | Revenue Per Share 64.854 | Quarterly Revenue Growth 0.086 |
The market value of Papa Johns International is measured differently than its book value, which is the value of Papa that is recorded on the company's balance sheet. Investors also form their own opinion of Papa Johns' value that differs from its market value or its book value, called intrinsic value, which is Papa Johns' 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 Papa Johns' market value can be influenced by many factors that don't directly affect Papa Johns' 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 Papa Johns' value and its price as these two are different measures arrived at by different means. Investors typically determine if Papa Johns is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Papa Johns' 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.