Carrols Restaurant Debt
| TAST Stock | USD 9.54 0.01 0.10% |
Carrols Restaurant has over 1.24 Billion in debt which may indicate that it relies heavily on debt financing. At this time, Carrols Restaurant's Debt Equity Ratio is comparatively stable compared to the past year. Carrols Restaurant's financial risk is the risk to Carrols Restaurant stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Carrols Restaurant'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. Carrols Restaurant'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 Carrols Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Carrols Restaurant's stakeholders.
Carrols Restaurant Quarterly Net Debt |
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For most companies, including Carrols Restaurant, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Carrols Restaurant Group 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.
Price Book 2.9369 | Book Value 3.583 | Operating Margin 0.0223 | Profit Margin 0.0194 | Return On Assets 0.0251 |
Given that Carrols Restaurant'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 Carrols Restaurant 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 Carrols Restaurant to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Carrols Restaurant is said to be less leveraged. If creditors hold a majority of Carrols Restaurant's assets, the Company is said to be highly leveraged.
At this time, Carrols Restaurant's Debt Equity Ratio is comparatively stable compared to the past year. Carrols |
Carrols Restaurant Bond Ratings
Carrols Restaurant Group bond ratings play a critical role in determining how much Carrols Restaurant 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 Carrols Restaurant's borrowing costs.| Piotroski F Score | 7 Strong |
| Beneish M Score | -3.23 Unlikely Manipulator |
Carrols Restaurant Debt to Cash Allocation
As Carrols Restaurant Group follows its natural business cycle, the capital allocation decisions will not magically go away. Carrols Restaurant'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 1.24 B in liabilities with Debt to Equity (D/E) ratio of 7.69, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Carrols Restaurant has a current ratio of 0.33, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Carrols Restaurant until it has trouble settling it off, either with new capital or with free cash flow. So, Carrols Restaurant'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 Carrols Restaurant sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Carrols to invest in growth at high rates of return. When we think about Carrols Restaurant's use of debt, we should always consider it together with cash and equity.Carrols Restaurant Total Assets Over Time
Carrols Restaurant 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 Carrols Restaurant's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Carrols Restaurant, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Carrols Restaurant debt ratio should be compared their industry average or other competing firms.Carrols Restaurant Corporate Bonds Issued
Carrols Restaurant 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. Carrols Restaurant 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 Carrols bonds can be classified according to their maturity, which is the date when Carrols Restaurant Group 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.
Carrols Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Carrols Restaurant Use of Financial Leverage
Carrols Restaurant financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Carrols Restaurant'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 Carrols Restaurant assets, the company is considered highly leveraged. Understanding the composition and structure of overall Carrols Restaurant 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 Carrols Restaurant'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 Carrols Restaurant'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 | ||
| Short and Long Term Debt Total | 1.2 B | 1.3 B | |
| Net Debt | 1.2 B | 1.3 B | |
| Long Term Debt | 421.8 M | 442.9 M | |
| Short and Long Term Debt | 7.2 M | 6.8 M | |
| Short Term Debt | 56.6 M | 59.4 M | |
| Long Term Debt Total | 551.7 M | 328.7 M | |
| Net Debt To EBITDA | 8.30 | 5.48 | |
| Debt To Equity | 2.55 | 2.67 | |
| Interest Debt Per Share | 9.72 | 18.70 | |
| Debt To Assets | 0.26 | 0.24 | |
| Long Term Debt To Capitalization | 0.69 | 0.92 | |
| Total Debt To Capitalization | 0.72 | 0.94 | |
| Debt Equity Ratio | 2.55 | 2.67 | |
| Debt Ratio | 0.26 | 0.24 | |
| Cash Flow To Debt Ratio | 0.30 | 0.21 |
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 Carrols Restaurant 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, Carrols Restaurant's short interest history, or implied volatility extrapolated from Carrols Restaurant options trading.
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When determining whether Carrols Restaurant is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Carrols Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Carrols Restaurant Group Stock. Highlighted below are key reports to facilitate an investment decision about Carrols Restaurant Group Stock:Check out the analysis of Carrols Restaurant Fundamentals Over Time. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Complementary Tools for Carrols Stock analysis
When running Carrols Restaurant's price analysis, check to measure Carrols Restaurant'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 Carrols Restaurant is operating at the current time. Most of Carrols Restaurant's value examination focuses on studying past and present price action to predict the probability of Carrols Restaurant's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Carrols Restaurant's price. Additionally, you may evaluate how the addition of Carrols Restaurant to your portfolios can decrease your overall portfolio volatility.
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Is Carrols Restaurant'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 Carrols Restaurant. If investors know Carrols 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 Carrols Restaurant 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 3.383 | Dividend Share 0.02 | Earnings Share 0.53 | Revenue Per Share 36.392 | Quarterly Revenue Growth 0.016 |
The market value of Carrols Restaurant is measured differently than its book value, which is the value of Carrols that is recorded on the company's balance sheet. Investors also form their own opinion of Carrols Restaurant's value that differs from its market value or its book value, called intrinsic value, which is Carrols Restaurant'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 Carrols Restaurant's market value can be influenced by many factors that don't directly affect Carrols Restaurant'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 Carrols Restaurant's value and its price as these two are different measures arrived at by different means. Investors typically determine if Carrols Restaurant is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Carrols Restaurant'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.