Unifirst Story

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UNF -- USA Stock  

USD 223.66  3.06  1.39%

Unifirst is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 6th of January 2021. Unifirst Long Term Debt to Equity is projected to slightly decrease based on the last few years of reporting. The past year's Long Term Debt to Equity was at 0.000176. The current year Calculated Tax Rate is expected to grow to 32.18, whereas Revenue Per Employee is forecasted to decline to about 115.9 K. As many millenniums are trying to avoid industrials space, it makes sense to digest Unifirst a little further and try to understand its current market patterns. We will analyze why Unifirst investors may still consider a stake in the business.
Published over two weeks ago
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You think Unifirst (NYSE:UNF) debt is an issue for shareholders?
The company has 41.83 M in debt with debt to equity (D/E) ratio of 0.02, which may show that the firm is not taking advantage of profits from borrowing. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Unifirst has an asset utilization ratio of 105.76 percent. This indicates that the company is making $1.06 for each dollar of assets. An increasing asset utilization means that Unifirst is more efficient with each dollar of assets it utilizes for everyday operations.
Unifirst financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Unifirst, including all of Unifirst'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 Unifirst assets, the company is considered highly leveraged. Understanding the composition and structure of overall Unifirst 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 Unifirst Total Liabilities

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

How important is Unifirst's Liquidity

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

Breaking down the case for Unifirst

Unifirst reported the last year's revenue of 1.8 B. Total Income to common stockholders was 135.77 M with profit before taxes, overhead, and interest of 639.23 M.

Asset Breakdown

660 M
Assets Non Current
287 M
761.6 M
Current Assets
Total Assets1.74 Billion
Current Assets761.64 Million
Assets Non Current659.96 Million
Goodwill286.97 Million
Tax Assets8.49 Million

Will Unifirst continue to surge?

Value At Risk just dropped to -3.8, may indicate upcoming price depreciation. Unifirst currently demonstrates below-verage downside deviation. It has Information Ratio of 0.02 and Jensen Alpha of 0.04. However, we do advice investors to further question Unifirst expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Although other entities under the specialty business services industry are still a bit expensive, Unifirst may offer a potential longer-term growth to shareholders. To summarize, as of the 5th of January 2021, we see that Unifirst almost mirrors the market. The firm is overvalued with very low chance of distress within the next 24 months. Our concluding 30 days 'Buy-Sell' recommendation on the firm is Strong Hold.

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 Vlad Skutelnik do not own shares of Unifirst. Please refer to our Terms of Use for any information regarding our disclosure principles.

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