Darden Restaurants has 5.77
B in debt with debt to equity (D/E) ratio of 2.35, meaning that Darden Restaurants heavily relies on borrowing funds for operations. The entity has a current ratio of 0.71, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Earning per share calculations of Darden Restaurants is based on official Zacks consensus of 11 analysts regarding Darden Restaurants' future annual earnings. Given the historical accuracy of 96.71%, the future earnings per share of the company is estimated to be 3.2938 with the lowest and highest values of 2.64 and 3.74, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.
Darden Restaurants financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Darden Restaurants, including all of Darden Restaurants'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 Darden Restaurants assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Darden Restaurants 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 Darden Total Debt
Darden Restaurants liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Darden Restaurants 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 Darden Restaurants balance sheet include debt obligations and money owed to different Darden Restaurants vendors, workers, and loan providers. Below is the chart of Darden main long-term debt accounts currently reported on its balance sheet.
You can use Darden Restaurants
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Darden Restaurants's Liquidity
Darden Restaurants
financial leverage refers to using borrowed capital as a funding source to finance Darden Restaurants ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Darden Restaurants 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 Darden Restaurants' 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 Darden Restaurants' 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 Darden Restaurants's total debt and its cash.
A Deeper Perspective
The current rise in Darden Restaurants short term price appreciation could raise concerns from stockholders as the firm it trading at a share price of
141.03 on
2,914,615 in volume. The company directors and management have successfully maneuvered the firm at convenient times to take advantage of all market conditions in
February. The stock standard deviation of daily returns for 30 days investing horizon is currently 2.06. The current volatility is consistent with the ongoing market swings in
February 2021 as well as with Darden Restaurants unsystematic, company-specific events.
Asset Breakdown
| Total Assets | 9.59 Billion |
| Current Assets | 1.19 Billion |
| Assets Non Current | 8.41 Billion |
| Goodwill | 2.01 Billion |
| Tax Assets | 17 Million |
Another 3 percent rise for Darden Restaurants
The variance is down to 3.83 as of today.
As of the 25th of March, Darden Restaurants shows the Mean Deviation of 1.54,
downside deviation of 1.83, and Coefficient Of Variation of 746.5. Darden Restaurants
technical analysis allows you to utilize
historical prices and volume patterns in order to determine a pattern that computes the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of
historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate data for nineteen
technical drivers for Darden Restaurants, which can be compared to its rivals. Please confirm
Darden Restaurants treynor ratio, as well as the
relationship between the downside variance and
kurtosis to decide if Darden Restaurants is priced favorably, providing market reflects its regular price of 141.03 per share. Given that Darden Restaurants has
jensen alpha of 0.2731, we urge you to verify Darden Restaurants's prevailing market performance to make sure the company can sustain itself at a future point.
Our Bottom Line On Darden Restaurants
While other entities within the restaurants industry are still a little expensive, even after the recent corrections, Darden Restaurants may offer a potential longer-term growth to stockholders. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither acquire new shares of Darden nor drop your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Darden Restaurants.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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 Rifka Kats do not own shares of Darden Restaurants. Please refer to our
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