Rimini Street Current Financial Leverage
RMNI Stock | USD 2.80 0.01 0.36% |
Rimini Street holds a debt-to-equity ratio of 0.0. As of now, Rimini Street's Debt To Assets are increasing as compared to previous years. The Rimini Street's current Debt Ratio is estimated to increase to 0.20, while Net Debt is forecasted to increase to (32.2 M). Rimini Street's financial risk is the risk to Rimini Street 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).
As of now, Rimini Street's Debt To Assets are increasing as compared to previous years. The Rimini Street's current Debt Ratio is estimated to increase to 0.20, while Net Debt is forecasted to increase to (32.2 M). Rimini |
Rimini Street Financial Leverage Rating
Rimini Street bond ratings play a critical role in determining how much Rimini Street 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 Rimini Street's borrowing costs.Piotroski F Score | 6 Healthy |
Beneish M Score | -1.95 Possible Manipulator |
Rimini Street Debt to Cash Allocation
As Rimini Street follows its natural business cycle, the capital allocation decisions will not magically go away. Rimini Street'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 81.98 M in liabilities. Rimini Street has a current ratio of 0.77, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Rimini Street until it has trouble settling it off, either with new capital or with free cash flow. So, Rimini Street'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 Rimini Street sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Rimini to invest in growth at high rates of return. When we think about Rimini Street's use of debt, we should always consider it together with cash and equity.Rimini Street Common Stock Shares Outstanding Over Time
Rimini Street 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 Rimini Street's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Rimini Street, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Rimini Street debt ratio should be compared their industry average or other competing firms.Rimini Net Debt
Net Debt |
|
Understaning Rimini Street Use of Financial Leverage
Rimini Street financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Rimini Street'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 Rimini Street assets, the company is considered highly leveraged. Understanding the composition and structure of overall Rimini Street 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 Rimini Street'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 Rimini Street'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).
Last Reported | Projected for Next Year | ||
Net Debt | -33.9 M | -32.2 M | |
Long Term Debt | 64.2 M | 44.7 M | |
Short and Long Term Debt | 5.9 M | 5.4 M | |
Short Term Debt | 10.6 M | 5.8 M | |
Short and Long Term Debt Total | 82 M | 51.9 M | |
Long Term Debt Total | 80.5 M | 51.7 M | |
Net Debt To EBITDA | (0.60) | (0.57) | |
Debt To Equity | (1.89) | (1.80) | |
Interest Debt Per Share | 0.91 | 0.70 | |
Debt To Assets | 0.18 | 0.20 | |
Long Term Debt To Capitalization | 2.60 | 2.47 | |
Total Debt To Capitalization | 2.12 | 1.46 | |
Debt Equity Ratio | (1.89) | (1.80) | |
Debt Ratio | 0.18 | 0.20 | |
Cash Flow To Debt Ratio | 0.17 | 0.16 |
Currently Active Assets on Macroaxis
When determining whether Rimini Street offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Rimini Street's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Rimini Street Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Rimini Street Stock:Check out the analysis of Rimini Street Fundamentals Over Time. For more detail on how to invest in Rimini Stock please use our How to Invest in Rimini Street guide.You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Complementary Tools for Rimini Stock analysis
When running Rimini Street's price analysis, check to measure Rimini Street's 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 Rimini Street is operating at the current time. Most of Rimini Street's value examination focuses on studying past and present price action to predict the probability of Rimini Street's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Rimini Street's price. Additionally, you may evaluate how the addition of Rimini Street to your portfolios can decrease your overall portfolio volatility.
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Commodity Directory Find actively traded commodities issued by global exchanges |
Is Rimini Street's 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 Rimini Street. If investors know Rimini 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 Rimini Street 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 37.998 | Earnings Share 0.29 | Revenue Per Share 4.844 | Quarterly Revenue Growth 0.032 | Return On Assets 0.0854 |
The market value of Rimini Street is measured differently than its book value, which is the value of Rimini that is recorded on the company's balance sheet. Investors also form their own opinion of Rimini Street's value that differs from its market value or its book value, called intrinsic value, which is Rimini Street's 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 Rimini Street's market value can be influenced by many factors that don't directly affect Rimini Street's 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 Rimini Street's value and its price as these two are different measures arrived at by different means. Investors typically determine if Rimini Street is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Rimini Street's 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.