The company currently holds 11.83
B in liabilities with Debt to Equity (D/E) ratio of 0.44, which is about average as compared to similar companies.
Macroaxis provides trade recommendations on Nvidia Corp to complement and cross-verify current
analyst consensus on Nvidia Corp. Our advice engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
NVIDIA financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of NVIDIA, including all of NVIDIA'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 NVIDIA assets, the company is considered highly leveraged. Understanding the
composition and structure of overall NVIDIA 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 NVIDIA Total Debt
NVIDIA liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. NVIDIA 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 NVIDIA balance sheet include debt obligations and money owed to different NVIDIA vendors, workers, and loan providers. Below is the chart of NVIDIA main long-term debt accounts currently reported on its balance sheet.
You can use NVIDIA
financial leverage analysis tool to get a better grip on understanding its financial position
How important is NVIDIA's Liquidity
NVIDIA
financial leverage refers to using borrowed capital as a funding source to finance NVIDIA ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. NVIDIA 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 NVIDIA'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 NVIDIA'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 NVIDIA's total debt and its cash.
Is NVIDIA valued fairly by the market?
Nvidia Corp reported the previous year's revenue of 26.91
B. Net Income was 9.75
B with profit before overhead, payroll, taxes, and interest of 17.48
B.
Asset Breakdown
| Total Assets | 38.41 Billion |
| Current Assets | 23.62 Billion |
| Assets Non Current | 15.8 Billion |
| Goodwill | 8.6 Billion |
| Tax Assets | 1 Billion |
Our perspective of the current Nvidia Corp rise
Current Information Ratio is up to -0.07. Price may slip again. Nvidia Corp exhibits very low volatility with skewness of 0.1 and kurtosis of -0.66. However, we advise investors to further study Nvidia Corp technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Nvidia Corp'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 Nvidia Corp'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.
Nvidia Corp Implied Volatility
Nvidia Corp's implied volatility exposes the market's sentiment of Nvidia Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Nvidia Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Nvidia Corp stock will not fluctuate a lot when Nvidia Corp's options are near their expiration.
Our Final Take On Nvidia Corp
Whereas some firms in the semiconductors industry are either recovering or due for a correction, Nvidia may not be as strong as the others in terms of longer-term growth potentials. All things considered, as of the 16th of July 2022, our current 90 days advice on the company is
Cautious Hold. We believe Nvidia Corp is
undervalued with
very small probability of distress for the next two years.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
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 Ellen Johnson do not own shares of NVIDIA. Please refer to our
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