Macys Story

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M -- USA Stock  

USD 6.11  0.20  3.17%

Macys Inc is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 2nd of September 2020. The stock continues to experience above-average trading activities. As many passive investors are finally getting excited about consumer cyclical space, Macys Inc could be a good starting point. Let's summarize the possibilities of Macys maintaining its debt level in October.
Published over two weeks ago
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Will Macys (NYSE:M) debt increase in October
The entity has accumulated 8.58 B in total debt with debt to equity ratio (D/E) of 3.18, indicating that Macys Inc relies heavily on borrowing. The firm has a current ratio of 1.22, implying that it may not be capable to disburse its interest payments when they become due. The company has Profit Margin of (13.83) %, which may imply that it does not effectively control operational costs or executes on its competitive strategy. This is way below average. Similarly, it shows Operating Margin of 4.7 %, which implies that for every $100 of sales, it generated an operating income of 0.05.
Macys financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Macys, including all of Macys'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 Macys assets, the company is considered highly leveraged. Understanding the composition and structure of overall Macys 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 Macys Total Liabilities

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

How important is Macys's Liquidity

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

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Macys, but it might be worth checking our own buy vs. sell analysis

Another Deeper Perspective

The small pull down in market price for the last few months may encourage stakeholders to take a closer look at the firm as it closed today at a share price of 6.7 on very low momentum in trading volume. The company management teams did not add much value to Macys Inc investors in August. However, diversifying your holdings with Macys 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 4.9. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Macys Inc partners.

Liabilities Breakdown

Tax Liabilities
5.7 B
Current Liabilities
10.5 B
Long-Term Liabilities
Total Liabilities16.18 Billion
Current Liabilities5.7 Billion
Long-Term Liabilities10.49 Billion
Tax Liabilities1.57 Billion

Will Macys continue to hike?

New value at risk is at -7.38. Macys Inc exhibits above-average semi-deviation for your current time horizon. We encourage investors to investigate Macys Inc individually to make sure intended market timing strategies and available technical indicagtors are consistent with their estimates about Macys future systematic risk.

Our Final Take On Macys

While many other companies in the department stores industry are either recovering or due for a correction, Macys may not be as strong as the others in terms of longer-term growth potentials. All things considered, as of the 1st of September 2020, our present 30 days buy vs. sell advice on the company is Strong Sell. We believe Macys is overvalued with below average probability of financial unrest for the next two years.

About Contributor

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 Achuva Shats do not own shares of Macys Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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