Asset Breakdown
250.5 M
Assets Non Current
430.1 M
Current Assets
| Total Assets | 680.66 Million | |
| Current Assets | 430.13 Million | |
| Assets Non Current | 250.53 Million | |
| Tax Assets | 8.57 Million |
Thinking to exit Cato (NYSE:CATO) based on its current debt commitments?
 | By Rifka Kats | Macroaxis Story |
Cato is scheduled to announce its earnings today. While some millenniums are indifferent towards consumer cyclical space, it makes sense to outline Cato Corporation as a unique investment alternative. We will evaluate why recent Cato price moves suggest a bounce in September. Here we also measure the ability of Cato to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
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Reviewed by Michael Smolkin
The entity currently holds 210.39 M in liabilities with Debt to Equity (D/E) ratio of 0.79, which is about average as compared to similar companies. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Cato has an asset utilization ratio of 101.39 percent. This suggests that the company is making $1.01 for each dollar of assets. An increasing asset utilization means that Cato Corporation is more efficient with each dollar of assets it utilizes for everyday operations. Cato financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Cato, including all of Cato'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 Cato assets, the company is considered highly leveraged. Understanding the composition and structure of overall Cato 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.
How important is Cato's Liquidity
Cato financial leverage refers to using borrowed capital as a funding source to finance Cato Corporation ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cato 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 Cato'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 Cato'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 Cato's total debt and its cash.
Detailed Perspective On Cato
Cato price slide over the last few months could raise concerns from institutional investors as the firm closed today at a share price of 7.42 on 313,573 in volume. The company management teams were not very successful in positioning the firm resources to exploit market volatility in July. However, diversifying your holdings with Cato Corporation or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.34. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Cato partners.
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