Tidewater Midstream Current Debt
TWM Stock | CAD 0.71 0.02 2.74% |
Tidewater Midstream and holds a debt-to-equity ratio of 2.584. At this time, Tidewater Midstream's Net Debt is very stable compared to the past year. As of the 5th of May 2024, Short Term Debt is likely to grow to about 81.3 M, while Short and Long Term Debt Total is likely to drop about 614.9 M. With a high degree of financial leverage come high-interest payments, which usually reduce Tidewater Midstream's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Tidewater Midstream's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Tidewater Midstream's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Tidewater Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Tidewater Midstream's stakeholders.
For most companies, including Tidewater Midstream, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Tidewater Midstream and the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 1.0618 | Book Value 0.727 | Operating Margin (0.07) | Profit Margin (0.17) | Return On Assets (0.01) |
Tidewater |
Tidewater Midstream Financial Leverage Rating
Tidewater Midstream and bond ratings play a critical role in determining how much Tidewater Midstream 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 Tidewater Midstream's borrowing costs.Tidewater Midstream and Debt to Cash Allocation
As Tidewater Midstream and follows its natural business cycle, the capital allocation decisions will not magically go away. Tidewater Midstream's 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 accumulated 97.8 M in total debt with debt to equity ratio (D/E) of 2.58, implying the company greatly relies on financing operations through barrowing. Tidewater Midstream and has a current ratio of 1.15, suggesting that it may have difficulties to pay its financial obligations in time and when they become due. Debt can assist Tidewater Midstream until it has trouble settling it off, either with new capital or with free cash flow. So, Tidewater Midstream's 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 Tidewater Midstream and sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Tidewater to invest in growth at high rates of return. When we think about Tidewater Midstream's use of debt, we should always consider it together with cash and equity.Tidewater Midstream Total Assets Over Time
Tidewater Midstream 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 Tidewater Midstream's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Tidewater Midstream, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Tidewater Midstream debt ratio should be compared their industry average or other competing firms.Tidewater Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Tidewater Midstream Use of Financial Leverage
Tidewater Midstream financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Tidewater Midstream'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 Tidewater Midstream assets, the company is considered highly leveraged. Understanding the composition and structure of overall Tidewater Midstream 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 Tidewater Midstream'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 Tidewater Midstream'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).
Last Reported | Projected for Next Year | ||
Short and Long Term Debt Total | 1.1 B | 614.9 M | |
Net Debt | 320 M | 571.6 M | |
Long Term Debt | 222.3 M | 211.2 M | |
Long Term Debt Total | 1 B | 562.8 M | |
Short and Long Term Debt | 112.5 M | 106.6 M | |
Short Term Debt | 54 M | 81.3 M | |
Net Debt To EBITDA | 7.17 | 5.11 | |
Debt To Equity | 2.47 | 2.60 | |
Interest Debt Per Share | 2.04 | 1.42 | |
Debt To Assets | 0.47 | 0.27 | |
Long Term Debt To Capitalization | 0.43 | 0.38 | |
Total Debt To Capitalization | 0.71 | 0.38 | |
Debt Equity Ratio | 2.47 | 2.60 | |
Debt Ratio | 0.47 | 0.27 | |
Cash Flow To Debt Ratio | 0.08 | 0.14 |
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Check out the analysis of Tidewater Midstream Fundamentals Over Time. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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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.