Twitter Current Financial Leverage

TWTR -  USA Stock  

USD 68.33  0.36  0.52%

Twitter's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Twitter's financial risk is the risk to Twitter 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).
Additionally, take a look at the analysis of Twitter Fundamentals Over Time.

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Twitter Total Debt is relatively stable at the moment as compared to the past year. Twitter reported last year Total Debt of 1.52 Billion. As of 07/27/2021, Debt Non Current is likely to grow to about 1.6 B, while Debt Current is likely to drop slightly above 69.2 M.

Twitter Current Financial Burden

Twitter'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. Twitter'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 Twitter Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Twitter's stakeholders.

Asset vs Debt

Equity vs Debt

Given the importance of Twitter's capital structure, the first step in the capital decision process is for the management of Twitter to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Twitter to issue bonds at a reasonable cost.

Twitter Financial Leverage Rating

Twitter bond ratings play a critical role in determining how much Twitter 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 Twitter's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A
Piotroski F Score
5  Healthy
Beneish M Score

Twitter Debt to Cash Allocation

As Twitter follows its natural business cycle, the capital allocation decisions will not magically go away. Twitter'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 6.28 B in liabilities with Debt to Equity (D/E) ratio of 0.81, which is about average as compared to similar companies. Twitter has a current ratio of 4.74, suggesting that it is liquid enough and is able to pay its financial obligations when due.

Twitter Receivables Over Time

Twitter Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Twitter uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Twitter Debt Ratio

    
  11.35   
It seems most of the Twitter's assets are financed through equity. 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 Twitter's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Twitter, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a Twitter debt ratio should be compared their industry average or other competing firms.
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Twitter Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Twitter, understanding its historical liability is critical in projecting Twitter's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how Twitter uses its financing power over time.

Understaning Twitter Use of Financial Leverage

Twitter financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Twitter'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 Twitter assets, the company is considered highly leveraged. Understanding the composition and structure of overall Twitter 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.
Please read more on our technical analysis page.
Last ReportedProjected for 2021
Total Debt1.5 B1.6 B
Debt Current72.8 M69.2 M
Debt Non Current1.4 B1.6 B
Issuance Repayment of Debt Securities-90.5 M-92.9 M
Long Term Debt to Equity 0.32  0.27 
Debt to Equity Ratio 0.44  0.36 
Twitter, Inc. operates as a platform for public self-expression and conversation in real time United States, Japan, and internationally. Twitter, Inc. was founded in 2006 and is headquartered in San Francisco, California. Twitter operates under Internet Content Information classification in the United States and is traded on New York Stock Exchange. It employs 6100 people.

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Additionally, take a look at the analysis of Twitter Fundamentals Over Time. Note that the Twitter information on this page should be used as a complementary analysis to other Twitter's 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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When running Twitter price analysis, check to measure Twitter'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 Twitter is operating at the current time. Most of Twitter's value examination focuses on studying past and present price action to predict the probability of Twitter's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Twitter's price. Additionally, you may evaluate how the addition of Twitter to your portfolios can decrease your overall portfolio volatility.
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The market value of Twitter is measured differently than its book value, which is the value of Twitter that is recorded on the company's balance sheet. Investors also form their own opinion of Twitter's value that differs from its market value or its book value, called intrinsic value, which is Twitter'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 Twitter's market value can be influenced by many factors that don't directly affect Twitter underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Twitter's value and its price as these two are different measures arrived at by different means. Investors typically determine Twitter value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Twitter'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.