Lindblad Expeditions Current Financial Leverage

LIND Stock  USD 9.25  0.15  1.65%   
Lindblad Expeditions holds a debt-to-equity ratio of 0.0. At present, Lindblad Expeditions' Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Long Term Debt is expected to grow to about 652.9 M, whereas Short and Long Term Debt is forecasted to decline to about 44.6 K. Lindblad Expeditions' financial risk is the risk to Lindblad Expeditions stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
At present, Lindblad Expeditions' Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Long Term Debt is expected to grow to about 652.9 M, whereas Short and Long Term Debt is forecasted to decline to about 44.6 K.
  
Check out the analysis of Lindblad Expeditions Fundamentals Over Time.

Lindblad Expeditions Financial Leverage Rating

Lindblad Expeditions Holdings bond ratings play a critical role in determining how much Lindblad Expeditions have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Lindblad Expeditions' borrowing costs.
Piotroski F Score
4  Poor
Beneish M Score

Lindblad Expeditions Debt to Cash Allocation

As Lindblad Expeditions Holdings follows its natural business cycle, the capital allocation decisions will not magically go away. Lindblad Expeditions' decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company currently holds 623.75 M in liabilities. Lindblad Expeditions has a current ratio of 0.61, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Lindblad Expeditions until it has trouble settling it off, either with new capital or with free cash flow. So, Lindblad Expeditions' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Lindblad Expeditions sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Lindblad to invest in growth at high rates of return. When we think about Lindblad Expeditions' use of debt, we should always consider it together with cash and equity.

Lindblad Expeditions Total Assets Over Time

Lindblad Expeditions Assets Financed by Debt

Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Lindblad Expeditions' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Lindblad Expeditions, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Lindblad Expeditions debt ratio should be compared their industry average or other competing firms.

Lindblad Short Long Term Debt Total

Short Long Term Debt Total

654.94 Million

At present, Lindblad Expeditions' Short and Long Term Debt Total is projected to increase significantly based on the last few years of reporting.

Understaning Lindblad Expeditions Use of Financial Leverage

Lindblad Expeditions financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Lindblad Expeditions's total debt position, including all of 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 Lindblad Expeditions assets, the company is considered highly leveraged. Understanding the composition and structure of overall Lindblad Expeditions debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Lindblad Expeditions' 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 Lindblad Expeditions' 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).
Last ReportedProjected for 2024
Short and Long Term Debt Total623.7 M654.9 M
Net Debt436.4 M458.2 M
Short Term DebtM1.9 M
Long Term Debt621.8 M652.9 M
Short and Long Term Debt47 K44.6 K
Long Term Debt Total245.6 M196.4 M
Long Term Debt To Capitalization 1.32  0.66 
Total Debt To Capitalization 1.32  0.67 
Debt Equity Ratio(4.12)(3.91)
Debt Ratio 0.75  0.66 
Cash Flow To Debt Ratio 0.04  0.04 
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When determining whether Lindblad Expeditions is a strong investment it is important to analyze Lindblad Expeditions' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Lindblad Expeditions' future performance. For an informed investment choice regarding Lindblad Stock, refer to the following important reports:
Check out the analysis of Lindblad Expeditions Fundamentals Over Time.
You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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Is Lindblad Expeditions' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Lindblad Expeditions. If investors know Lindblad will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Lindblad Expeditions listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share
(0.94)
Revenue Per Share
10.694
Quarterly Revenue Growth
0.063
Return On Assets
0.0082
Return On Equity
(19.47)
The market value of Lindblad Expeditions is measured differently than its book value, which is the value of Lindblad that is recorded on the company's balance sheet. Investors also form their own opinion of Lindblad Expeditions' value that differs from its market value or its book value, called intrinsic value, which is Lindblad Expeditions' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Lindblad Expeditions' market value can be influenced by many factors that don't directly affect Lindblad Expeditions' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Lindblad Expeditions' value and its price as these two are different measures arrived at by different means. Investors typically determine if Lindblad Expeditions is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Lindblad Expeditions' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.