Interface Story

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TILE -- USA Stock  

USD 12.42  0.36  2.82%

Interface is scheduled to announce its earnings today. The next earnings report is expected on the 14th of May 2021. Interface Earnings before Tax are projected to decrease significantly based on the last few years of reporting. The past year's Earnings before Tax were at 19.03 Million. The current year Free Cash Flow is expected to grow to about 4.1 M, whereas Revenue Per Employee is forecasted to decline to about 261.1 K. As many millenniums are trying to avoid consumer cyclical space, it makes sense to digest Interface a little further and try to understand its current market patterns. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over a month ago
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How much will Interface owe in April?
Interface currently holds 698.76 M in liabilities with Debt to Equity (D/E) ratio of 2.43, implying the firm greatly relies on financing operations through barrowing. The entity has a current ratio of 2.06, suggesting that it is liquid enough and is able to pay its financial obligations when due. The company has Profit Margin (PM) of (6.44) %, 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 13.04 %, which suggests for every 100 dollars of sales, it generated a net operating income of 0.13.
Interface financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Interface, including all of Interface'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 Interface assets, the company is considered highly leveraged. Understanding the composition and structure of overall Interface 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 Interface Total Liabilities

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

How important is Interface's Liquidity

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

An Additional Perspective On Interface

The latest price surge of Interface created some momentum for shareholders as it was traded today as low as 12.52 and as high as 13.07 per share. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in April. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.24. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Interface partners.

Liabilities Breakdown

155.7 M
Current Liabilities
432.8 M
Long-Term Liabilities
Total Liabilities463.85 Million
Current Liabilities155.65 Million
Long-Term Liabilities432.8 Million
Tax Liabilities12.6 Million

Can Interface build up on the latest surge?

Interface latest standard deviation ascents over 3.43. Interface shows above-average downside volatility for the selected time horizon. We advise investors to inspect Interface further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Interface future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Interface'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 Interface'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.

Our Conclusion on Interface

Although some firms under the furnishings, fixtures & appliances industry are still a bit expensive, Interface may offer a potential longer-term growth to shareholders. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to drop some or all of your Interface holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Interface.

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 Gabriel Shpitalnik do not own shares of Interface. Please refer to our Terms of Use for any information regarding our disclosure principles.

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