Apex Resources Current Financial Leverage
SLMLF Stock | USD 0.05 0.00 0.00% |
Apex Resources holds a debt-to-equity ratio of 0.0. Apex Resources' financial risk is the risk to Apex Resources 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).
Given that Apex Resources' debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Apex Resources is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Apex Resources to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Apex Resources is said to be less leveraged. If creditors hold a majority of Apex Resources' assets, the Company is said to be highly leveraged.
Apex |
Apex Resources Financial Leverage Rating
Apex Resources bond ratings play a critical role in determining how much Apex Resources 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 Apex Resources' borrowing costs.Apex Resources Debt to Cash Allocation
As Apex Resources follows its natural business cycle, the capital allocation decisions will not magically go away. Apex Resources' 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 has a current ratio of 1.46, which is within standard range for the sector. Debt can assist Apex Resources until it has trouble settling it off, either with new capital or with free cash flow. So, Apex Resources' 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 Apex Resources sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Apex to invest in growth at high rates of return. When we think about Apex Resources' use of debt, we should always consider it together with cash and equity.Apex Resources 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 Apex Resources' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Apex Resources, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a an Apex Resources debt ratio should be compared their industry average or other competing firms.Understaning Apex Resources Use of Financial Leverage
Apex Resources financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Apex Resources'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 Apex Resources assets, the company is considered highly leveraged. Understanding the composition and structure of overall Apex Resources 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 Apex Resources' 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 Apex Resources' 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).
Apex Resources Inc., an exploration stage company, engages in the exploration and evaluation of mineral properties in Canada. The company was formerly known as Sultan Minerals Inc. and changed its name to Apex Resources Inc. in July 2016. Apex Resources operates under Other Industrial Metals Mining classification in the United States and is traded on OTC Exchange. Please read more on our technical analysis page.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Apex Resources in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Apex Resources' short interest history, or implied volatility extrapolated from Apex Resources options trading.
Currently Active Assets on Macroaxis
Check out the analysis of Apex Resources Fundamentals Over Time. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Complementary Tools for Apex Pink Sheet analysis
When running Apex Resources' price analysis, check to measure Apex Resources' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Apex Resources is operating at the current time. Most of Apex Resources' value examination focuses on studying past and present price action to predict the probability of Apex Resources' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Apex Resources' price. Additionally, you may evaluate how the addition of Apex Resources to your portfolios can decrease your overall portfolio volatility.
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |
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.