KING PHARMACEUTICALS Current Debt
| KG Stock | 26.82 0.21 0.78% |
KING PHARMACEUTICALS INC holds a debt-to-equity ratio of 0.41. At this time, KING PHARMACEUTICALS's Debt To Assets are most likely to increase slightly in the upcoming years. The KING PHARMACEUTICALS's current Debt Ratio is estimated to increase to 0.06, while Net Debt is projected to decrease to (4.2 M). KING PHARMACEUTICALS's financial risk is the risk to KING PHARMACEUTICALS stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
KING PHARMACEUTICALS'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. KING PHARMACEUTICALS'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 KING Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect KING PHARMACEUTICALS's stakeholders.
For most companies, including KING PHARMACEUTICALS, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for KING PHARMACEUTICALS INC, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, KING PHARMACEUTICALS's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 71.1069 |
KING PHARMACEUTICALS INC Debt to Cash Allocation
Many companies such as KING PHARMACEUTICALS, 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.
KING PHARMACEUTICALS INC reports 244.12 K of total liabilities with total debt to equity ratio (D/E) of 0.41, which is normal for its line of buisiness. KING PHARMACEUTICALS INC has a current ratio of 2.22, indicating that it is in good position to pay out its debt commitments in time. Note however, debt could still be an excellent tool for KING to invest in growth at high rates of return. KING PHARMACEUTICALS Total Assets Over Time
KING PHARMACEUTICALS Assets Financed by Debt
The debt-to-assets ratio shows the degree to which KING PHARMACEUTICALS uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.KING PHARMACEUTICALS Debt Ratio | 5.8 |
KING Long Term Debt
Long Term Debt |
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Understaning KING PHARMACEUTICALS Use of Financial Leverage
KING PHARMACEUTICALS's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures KING PHARMACEUTICALS's total debt position, including all outstanding debt obligations, and compares it with KING PHARMACEUTICALS's equity. Financial leverage can amplify the potential profits to KING PHARMACEUTICALS's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if KING PHARMACEUTICALS is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Long Term Debt | 389.9 M | 437.9 M | |
| Short and Long Term Debt Total | 244.1 K | 223.2 K | |
| Net Debt | -4 M | -4.2 M | |
| Short Term Debt | 75.5 K | 80 K | |
| Net Debt To EBITDA | (28.51) | (29.94) | |
| Interest Debt Per Share | 0.04 | 0.03 | |
| Debt To Assets | 0.05 | 0.06 | |
| Debt Ratio | 0.05 | 0.06 | |
| Cash Flow To Debt Ratio | (5.19) | (5.45) |
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Check out the analysis of KING PHARMACEUTICALS Fundamentals Over Time. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
Is Pharmaceuticals space 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 KING PHARMACEUTICALS. If investors know KING 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 KING PHARMACEUTICALS listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share 0.03 |
The market value of KING PHARMACEUTICALS INC is measured differently than its book value, which is the value of KING that is recorded on the company's balance sheet. Investors also form their own opinion of KING PHARMACEUTICALS's value that differs from its market value or its book value, called intrinsic value, which is KING PHARMACEUTICALS's 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 KING PHARMACEUTICALS's market value can be influenced by many factors that don't directly affect KING PHARMACEUTICALS's 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 KING PHARMACEUTICALS's value and its price as these two are different measures arrived at by different means. Investors typically determine if KING PHARMACEUTICALS is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, KING PHARMACEUTICALS's 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.