Is Pendragon Plc (OTC:PDGNF) having difficulty to pay out its debt?
 | By Ellen Johnson | Macroaxis Story |
Pendragon Plc is scheduled to announce its earnings tomorrow. While some of us are becoming more enthusiastic about pendragon plc space, let's digest Pendragon Plc in greater detail to make a better estimate of its debt utilization. Here we also measure the ability of Pendragon Plc to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
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Reviewed by Rifka Kats
This firm has accumulated 249.89 M in total debt with debt to equity ratio (D/E) of 3.65, implying Pendragon Plc greatly relies on financing operations through barrowing. The company has a current ratio of 0.86, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. The company has Profit Margin (PM) of (0.97) %, 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. Pendragon PLC financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Pendragon PLC, including all of Pendragon PLC'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 Pendragon PLC assets, the company is considered highly leveraged. Understanding the composition and structure of overall Pendragon PLC 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.
Watch out for price decline
Please consider monitoring Pendragon PLC on a daily basis if you are holding a position in it. Pendragon PLC is trading at a penny-stock level, and the possibility of delisting is much higher compared to other pink sheets. However, just because the pink sheet is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Pendragon PLC stock to be traded above the $1 level to remain listed. If Pendragon PLC pink sheet price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Pendragon PLC's Liquidity
Pendragon PLC financial leverage refers to using borrowed capital as a funding source to finance Pendragon PLC ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Pendragon PLC 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 Pendragon PLC'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 Pendragon PLC'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 Pendragon PLC's total debt and its cash.
Breaking it down a bit more
Pendragon Plc reported the revenue of 6.68 B. Net Income was 75.08 M with profit before overhead, payroll, taxes, and interest of 416 M.
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