Will Pioneer Power (NASDAQ:PPSI) debt increase in January
 | By Rifka Kats | Macroaxis Story |
The stock goes through an active upward rally. While some of us are becoming more enthusiastic about industrials space, let's concentrate on Pioneer Power Solutions in greater detail to make a better estimate of its debt utilization. Let's examine the possibilities of Pioneer Power maintaining its debt level in January.
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Michael Smolkin
Pioneer Power Solutions currently holds 2.78 M in liabilities with Debt to Equity (D/E) ratio of 0.19, which may suggest the firm is not taking enough advantage from borrowing. The entity has a current ratio of 2.25, suggesting that it is liquid enough and is able to pay its financial obligations when due. The company has Profit Margin (PM) of (59.2) %, 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. Similarly, it shows Operating Margin (OM) of (25.78) %, which suggests for every $100 dollars of sales, it generated a net operating loss of -0.26. Pioneer Power financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Pioneer Power, including all of Pioneer Power'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 Pioneer Power assets, the company is considered highly leveraged. Understanding the composition and structure of overall Pioneer Power 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 Pioneer Total Debt
Pioneer Power Solutions liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Pioneer Power Solutions 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 Pioneer Power balance sheet include debt obligations and money owed to different Pioneer Power vendors, workers, and loan providers. Below is the chart of Pioneer main long-term debt accounts currently reported on its balance sheet. You can use Pioneer Power Solutions financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Pioneer Power's Liquidity
Pioneer Power financial leverage refers to using borrowed capital as a funding source to finance Pioneer Power Solutions ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Pioneer Power 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 Pioneer Power'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 Pioneer Power'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 Pioneer Power's total debt and its cash.
Another Deeper Perspective
The current price rise of Pioneer Power Solutions may encourage stockholders to take a closer look at the company as it is trading at a share price of 3.56 on 449,300 in trading volume. The company management teams may have good odds in positioning the company resources to exploit market volatility in January. The stock standard deviation of daily returns for 30 days investing horizon is currently 28.85. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Pioneer Power partners.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial 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 Pioneer Power Solutions. Please refer to our Terms of Use for any information regarding our disclosure principles.