The newest price gain of Nordic American Tanker may encourage private investors to take a closer look at the firm as it is trading at a share price of 3.47 on 6,284,300 in trading volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in December. The stock standard deviation of daily returns for 90 days investing horizon is currently 4.55. This high volatility is attributed to the latest market swings and not-so-good earnings reports for some of the Nordic American Tanker partners.
What is December outlook for Nordic (NYSE:NAT)?
 | By Vlad Skutelnik | Macroaxis Story |
Nordic American Tanker is scheduled to announce its earnings today. The stock is currently undergoing a very aggressive trading activities. As many passive investors are finally getting excited about industrials space, Nordic American Tanker could be a good starting point. We will analyze why Nordic American investors may still consider a stake in the business.
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Reviewed by Michael Smolkin
The company has 356.27 M in debt with debt to equity (D/E) ratio of 0.72, which is OK given its current industry classification. Nordic American Tanker has a current ratio of 1.5, which is typical for the industry and considered as normal. Debt can assist Nordic American until it has trouble settling it off, either with new capital or with free cash flow. So, Nordic American's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Nordic American Tanker sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Nordic to invest in growth at high rates of return. When we think about Nordic American's use of debt, we should always consider it together with cash and equity.Nordic American financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Nordic American, including all of Nordic American'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 Nordic American assets, the company is considered highly leveraged. Understanding the composition and structure of overall Nordic American 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 Nordic Total Liabilities
Nordic American Tankers liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Nordic American Tankers 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 Nordic American balance sheet include debt obligations and money owed to different Nordic American vendors, workers, and loan providers. Below is the chart of Nordic short long-term liabilities accounts currently reported on its balance sheet. You can use Nordic American Tankers financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Nordic American's Liquidity
Nordic American financial leverage refers to using borrowed capital as a funding source to finance Nordic American Tankers ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nordic American 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 Nordic American'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 Nordic American'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 Nordic American's total debt and its cash.
Breaking down Nordic American Indicators
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