Tradeweb Markets Current Financial Leverage
| TW Stock | USD 102.96 1.13 1.11% |
Tradeweb Markets holds a debt-to-equity ratio of 0.005. At this time, Tradeweb Markets' Long Term Debt is fairly stable compared to the past year. Debt To Equity is likely to climb to 0.01 in 2024, whereas Long Term Debt Total is likely to drop slightly above 164.3 B in 2024. Tradeweb Markets' financial risk is the risk to Tradeweb Markets 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).
Asset vs Debt
Equity vs Debt
Tradeweb Markets' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Tradeweb Markets' 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 Tradeweb Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Tradeweb Markets' stakeholders.
For most companies, including Tradeweb Markets, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Tradeweb Markets 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 4.0462 | Book Value 25.345 | Operating Margin 0.3872 | Profit Margin 0.2727 | Return On Assets 0.063 |
Tradeweb |
Tradeweb Markets Financial Leverage Rating
Tradeweb Markets bond ratings play a critical role in determining how much Tradeweb Markets 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 Tradeweb Markets' borrowing costs.| Piotroski F Score | 5 Healthy |
| Beneish M Score | -2.89 Unlikely Manipulator |
Tradeweb Markets Debt to Cash Allocation
As Tradeweb Markets follows its natural business cycle, the capital allocation decisions will not magically go away. Tradeweb Markets' 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 reports 27.94 M of total liabilities with total debt to equity ratio (D/E) of 0.01, which may suggest the company is not taking enough advantage from financial leverage. Tradeweb Markets has a current ratio of 8.0, indicating that it is in good position to pay out its debt commitments in time. Debt can assist Tradeweb Markets until it has trouble settling it off, either with new capital or with free cash flow. So, Tradeweb Markets' 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 Tradeweb Markets sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Tradeweb to invest in growth at high rates of return. When we think about Tradeweb Markets' use of debt, we should always consider it together with cash and equity.Tradeweb Markets Total Assets Over Time
Tradeweb Markets 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 Tradeweb Markets' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Tradeweb Markets, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Tradeweb Markets debt ratio should be compared their industry average or other competing firms.Tradeweb Long Term Debt
Long Term Debt |
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Understaning Tradeweb Markets Use of Financial Leverage
Tradeweb Markets financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Tradeweb Markets'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 Tradeweb Markets assets, the company is considered highly leveraged. Understanding the composition and structure of overall Tradeweb Markets 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 Tradeweb Markets' 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 Tradeweb Markets' 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 | ||
| Long Term Debt | 174.7 B | 183.5 B | |
| Net Debt | -1.1 B | -1.1 B | |
| Long Term Debt Total | 176.8 B | 164.3 B | |
| Short Term Debt | 25.1 M | 23.9 M | |
| Short and Long Term Debt Total | 25.1 M | 23.5 M | |
| Net Debt To EBITDA | (2.47) | (2.59) | |
| Debt To Equity | 0.01 | 0.01 | |
| Interest Debt Per Share | 0.57 | 0.60 | |
| Debt To Assets | 0.01 | 0.01 | |
| Long Term Debt To Capitalization | 0.01 | 0.01 | |
| Total Debt To Capitalization | 0.01 | 0.01 | |
| Debt Equity Ratio | 0.01 | 0.01 | |
| Debt Ratio | 0.01 | 0.01 | |
| Cash Flow To Debt Ratio | 11.99 | 7.46 |
Tradeweb Markets Investors Sentiment
The influence of Tradeweb Markets' investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Tradeweb. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock market does not have solid backing from leading economists and market statisticians.
Investor biases related to Tradeweb Markets' public news can be used to forecast risks associated with an investment in Tradeweb. The trend in average sentiment can be used to explain how an investor holding Tradeweb can time the market purely based on public headlines and social activities around Tradeweb Markets. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Tradeweb Markets' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Tradeweb Markets' and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Tradeweb Markets' news discussions. The higher the estimated score, the more favorable is the investor's outlook on Tradeweb Markets.
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 Tradeweb Markets 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, Tradeweb Markets' short interest history, or implied volatility extrapolated from Tradeweb Markets options trading.
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When determining whether Tradeweb Markets is a strong investment it is important to analyze Tradeweb Markets' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Tradeweb Markets' future performance. For an informed investment choice regarding Tradeweb Stock, refer to the following important reports:Check out the analysis of Tradeweb Markets Fundamentals Over Time. For more information on how to buy Tradeweb Stock please use our How to Invest in Tradeweb Markets guide.You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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When running Tradeweb Markets' price analysis, check to measure Tradeweb Markets' 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 Tradeweb Markets is operating at the current time. Most of Tradeweb Markets' value examination focuses on studying past and present price action to predict the probability of Tradeweb Markets' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Tradeweb Markets' price. Additionally, you may evaluate how the addition of Tradeweb Markets to your portfolios can decrease your overall portfolio volatility.
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Is Tradeweb Markets' 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 Tradeweb Markets. If investors know Tradeweb 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 Tradeweb Markets 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 (0.02) | Dividend Share 0.36 | Earnings Share 1.71 | Revenue Per Share 6.348 | Quarterly Revenue Growth 0.263 |
The market value of Tradeweb Markets is measured differently than its book value, which is the value of Tradeweb that is recorded on the company's balance sheet. Investors also form their own opinion of Tradeweb Markets' value that differs from its market value or its book value, called intrinsic value, which is Tradeweb Markets' 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 Tradeweb Markets' market value can be influenced by many factors that don't directly affect Tradeweb Markets' 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 Tradeweb Markets' value and its price as these two are different measures arrived at by different means. Investors typically determine if Tradeweb Markets is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Tradeweb Markets' 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.