You think J Jill (NYSE:JILL) debt is an issue for stakeholders?

J Jill Inc is scheduled to announce its earnings today. As many millenniums are trying to avoid consumer cyclical space, it makes sense to summarize J Jill Inc a little further and try to understand its current market patterns. I will address a few possible reasons stakeholders do not currently respect this stock.
Published over a year ago
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Reviewed by Michael Smolkin

The entity currently holds 459.65 M in liabilities.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. J Jill has an asset utilization ratio of 83.92 percent. This denotes that the company is making $0.84 for each dollar of assets. An increasing asset utilization means that J Jill Inc is more efficient with each dollar of assets it utilizes for everyday operations.
The company has Profit Margin (PM) of (32.67) %, which may suggest that it does not properly executes on its current pricing strategies or is unable to control all of the operational costs. This is way below average. Similarly, it shows Operating Margin (OM) of (22.92) %, which suggests for every $100 dollars of sales, it generated a net operating loss of -0.23.
JJill financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of JJill, including all of JJill'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 JJill assets, the company is considered highly leveraged. Understanding the composition and structure of overall JJill 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 JJill Total Liabilities

JJill Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. JJill Inc 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 JJill balance sheet include debt obligations and money owed to different JJill vendors, workers, and loan providers. Below is the chart of JJill short long-term liabilities accounts currently reported on its balance sheet.
You can use JJill Inc financial leverage analysis tool to get a better grip on understanding its financial position

How important is JJill's Liquidity

JJill financial leverage refers to using borrowed capital as a funding source to finance JJill Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. JJill 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 JJill'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 JJill'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 JJill's total debt and its cash.

An Additional Perspective On JJill Inc

The firm reported the previous year's revenue of 426.73 M. Net Loss for the year was (139.4 M) with profit before overhead, payroll, taxes, and interest of 245.63 M.

Asset Breakdown

393.7 M
Assets Non Current
194.4 M
Goodwill
134.7 M
Current Assets
Total Assets507.91 Million
Current Assets134.7 Million
Assets Non Current393.69 Million
Goodwill194.36 Million

Our perspective of the new J Jill hike

Treynor ratio is down to 1.67. It may denote a possible volatility pull down. J Jill Inc is displaying above-average volatility over the selected time horizon. Investors should scrutinize J Jill Inc independently to ensure intended market timing strategies are aligned with expectations about J Jill volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure J Jill'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 J Jill'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 Final Takeaway

While some firms under the apparel retail industry are still a bit expensive, J Jill may offer a potential longer-term growth to stakeholders. To conclude, as of the 8th of June 2021, we believe J Jill is currently overvalued. It responds to the market and projects below average odds of distress in the next two years. Our present 90 days buy-sell recommendation on the company is Hold.

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Editorial Staff

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 JJill Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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