Asbury Automotive has 2.18
B in debt with debt to equity (D/E) ratio of 2.18, meaning that the entity heavily relies on borrowing funds for operations. The entity has a current ratio of 1.23, demonstrating that it is in a questionable position to pay out its financial commitments when the payables are due. The company has Net Profit Margin of
4.25 %, which may imply that it executes well on its competitive polices and has reasonable control over its expenses and variable costs. This is considered to be average in the sector. In the same way, it shows Net Operating Margin of
6.62 %, which entails that for every 100 dollars of revenue, it generated 0.07 of operating income.
Asbury Automotive financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Asbury Automotive, including all of Asbury Automotive's 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 Asbury Automotive assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Asbury Automotive debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Asbury Total Liabilities
Asbury Automotive liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Asbury Automotive has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Asbury Automotive balance sheet include debt obligations and money owed to different Asbury Automotive vendors, workers, and loan providers. Below is the chart of Asbury short long-term liabilities accounts currently reported on its balance sheet.
You can use Asbury Automotive Group
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Asbury Automotive's Liquidity
Asbury Automotive
financial leverage refers to using borrowed capital as a funding source to finance Asbury Automotive Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Asbury Automotive financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Asbury Automotive'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 Asbury Automotive'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). Please check the
breakdown between Asbury Automotive's total debt and its cash.
Breaking down Asbury Automotive Further
The firm reported the last year's revenue of 7.72
B. Total Income to common stockholders was 327.7
M with profit before taxes, overhead, and interest of 1.22
B.
Liabilities Breakdown
1.3 B
Long-Term Liabilities
| Total Liabilities | 2.51 Billion |
| Current Liabilities | 1.22 Billion |
| Long-Term Liabilities | 1.29 Billion |
| Tax Liabilities | 37.33 Million |
Asbury Automotive has 64 percent chance to dip under $193 in the coming weeks
Latest Skewness is up to -0.08. Price may dip again. Asbury Automotive Group exhibits very low volatility with skewness of -0.08 and kurtosis of 1.36. However, we advise investors to further study Asbury Automotive Group technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Asbury Automotive's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Asbury Automotive's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Takeaway on Asbury Automotive Investment
When is the right time to buy or sell Asbury Automotive Group? Buying stocks such as Asbury Automotive isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without
sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
To conclude, as of the 27th of July 2021, our research shows that Asbury Automotive is a rather very steady investment opportunity with a
low probability of distress in the next two years. From a slightly different view, the entity currently appears to be
fairly valued. Our overall 90 days advice on the firm is
Strong Hold.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Asbury Automotive Group. Please refer to our
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