You think Kulicke (NASDAQ:KLIC) debt is an issue for investors?

Kulicke And Soffa is scheduled to announce its earnings today. The next earnings report is expected on the 3rd of February 2021. Kulicke Net Income Per Employee is projected to decrease significantly based on the last few years of reporting. The past year's Net Income Per Employee was at 36,665. The current year Revenue Per Employee is expected to grow to about 286.8 K, whereas Average Assets are forecasted to decline to about 1.1 B. As many millenniums are trying to avoid technology space, it makes sense to go over Kulicke And Soffa a little further and try to understand its current market patterns.
Published over a year ago
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Reviewed by Michael Smolkin

The company currently holds 23.59 M in liabilities with Debt to Equity (D/E) ratio of 0.03, which may suggest the firm is not taking enough advantage from borrowing. Our trade recommendations module can be used to complement Kulicke And Soffa advice provided by average analyst sentiment. It analyzes the firm's potential to grow using fundamental, technical, data market data available at the time.
Kulicke financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Kulicke, including all of Kulicke'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 Kulicke assets, the company is considered highly leveraged. Understanding the composition and structure of overall Kulicke 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 Kulicke Total Debt

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

How important is Kulicke's Liquidity

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

Breaking down the case for Kulicke

The current rise in Kulicke And Soffa short term price appreciation may raise some interest from investors. The stock closed today at a share price of 31.27 on 1,619,058 in trading volume. The company directors and management have successfully maneuvered the firm at convenient times to take advantage of all market conditions in October. The stock standard deviation of daily returns for 30 days investing horizon is currently 2.33. The current volatility is consistent with the ongoing market swings in October 2020 as well as with Kulicke And Soffa unsystematic, company-specific events.

Asset Breakdown

203.4 M
Assets Non Current
Goodwill
948.8 M
Current Assets
Total Assets1.15 Billion
Current Assets948.76 Million
Assets Non Current203.42 Million
Goodwill114.33 Million
Tax Assets29.96 Million

Will Kulicke current rise continue?

Current treynor ratio indicator falls down to -1.85. Possible price jump? Kulicke And Soffa currently demonstrates below-verage downside deviation. It has Information Ratio of 0.08 and Jensen Alpha of 0.3. However, we do advice investors to further question Kulicke And Soffa expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Perspective on Kulicke

Whereas some other firms under the semiconductor equipment & materials industry are still a bit expensive, Kulicke may offer a potential longer-term growth to investors. With a relatively neutral outlook on the current economy, it is better to hold off any trading of Kulicke as the current risk-reward utility is not appealing enough. 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 Kulicke.

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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 Rifka Kats do not own shares of Kulicke and Soffa. Please refer to our Terms of Use for any information regarding our disclosure principles.

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