This firm currently holds 21.12
M in liabilities with Debt to Equity (D/E) ratio of 0.07, which may suggest Bitfarms is not taking enough advantage from borrowing.
One of the ways to look at asset utilization of Bitfarms is to check how much profit was generated for every dollar of assets it reports. Bitfarms utilizes its assets nearly 16.39 percent, earning $0.16 for each dollar of assets held by the firm. A positive asset utilization signifies that the company is slightly more effective with each dollar of assets it shows. Put another way, asset utilization of Bitfarms shows how effective it operates for each dollar spent on its assets.
Bitfarms financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Bitfarms, including all of Bitfarms'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 Bitfarms assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Bitfarms 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 Bitfarms Total Liabilities
Bitfarms liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Bitfarms 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 Bitfarms balance sheet include debt obligations and money owed to different Bitfarms vendors, workers, and loan providers. Below is the chart of Bitfarms short long-term liabilities accounts currently reported on its balance sheet.
You can use Bitfarms
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Bitfarms's Liquidity
Bitfarms
financial leverage refers to using borrowed capital as a funding source to finance Bitfarms ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Bitfarms 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 Bitfarms' 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 Bitfarms' 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 Bitfarms's total debt and its cash.
Detailed Perspective On Bitfarms
The company reported the previous year's revenue of 121.22
M. Net Income was 7.08
M with profit before overhead, payroll, taxes, and interest of 2.87
M.
Asset Breakdown
275.6 M
Assets Non Current
| Total Assets | 585.42 Million |
| Current Assets | 309.79 Million |
| Assets Non Current | 275.63 Million |
| Goodwill | 20.11 Million |
| Tax Assets | 3.99 Million |
Our take on today Bitfarms surge
Variance is down to 43.44. It may indicate a possible volatility dip. Bitfarms is displaying above-average volatility over the selected time horizon. Investors should scrutinize Bitfarms independently to ensure intended market timing strategies are aligned with expectations about Bitfarms volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Bitfarms' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Bitfarms' 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.
Bitfarms Implied Volatility
Bitfarms' implied volatility exposes the market's sentiment of Bitfarms stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Bitfarms' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Bitfarms stock will not fluctuate a lot when Bitfarms' options are near their expiration.
The Bottom Line
Although many of the other players in the capital markets industry are either recovering or due for a correction, Bitfarms may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 16th of May 2022, our actual 90 days buy-hold-sell recommendation on the firm is
Cautious Hold. We believe Bitfarms is currently
undervalued with
low probability of distress for the next two years.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
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 Bitfarms. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
editors@macroaxis.com