NACCO Industries 62954HAJ7 Bond
| NC Stock | USD 30.46 0.02 0.07% |
NACCO Industries holds a debt-to-equity ratio of 0.068. With a high degree of financial leverage come high-interest payments, which usually reduce NACCO Industries' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
NACCO Industries' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. NACCO Industries' 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 NACCO Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect NACCO Industries' stakeholders.
For most companies, including NACCO Industries, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for NACCO Industries, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, NACCO Industries' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
NACCO |
Given the importance of NACCO Industries' capital structure, the first step in the capital decision process is for the management of NACCO Industries to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of NACCO Industries to issue bonds at a reasonable cost.
| Popular Name | NACCO Industries NXPI 265 15 FEB 32 |
| Specialization | Thermal Coal |
| Equity ISIN Code | US6295791031 |
| Bond Issue ISIN Code | US62954HAJ77 |
NACCO Industries Outstanding Bond Obligations
| US62954RAA41 | US62954RAA41 | Details | |
| Boeing Co 2196 | US097023DG73 | Details | |
| US62957HAJ41 | US62957HAJ41 | Details | |
| NXPI 265 15 FEB 32 | US62954HAJ77 | Details | |
| NXPI 3125 15 FEB 42 | US62954HAL24 | Details | |
| NXPI 325 30 NOV 51 | US62954HAN89 | Details | |
| NXPI 25 11 MAY 31 | US62954HBA59 | Details | |
| NXPI 5 15 JAN 33 | US62954HBB33 | Details | |
| NXPI 44 01 JUN 27 | US62954HBE71 | Details | |
| NXPI 325 11 MAY 41 | US62954HAU23 | Details | |
| NXPI 43 18 JUN 29 | US62954HAV06 | Details | |
| NXPI 27 01 MAY 25 | US62954HAW88 | Details | |
| NXPI 34 01 MAY 30 | US62954HAY45 | Details | |
| Morgan Stanley 3591 | US61744YAK47 | Details | |
| Morgan Stanley 3971 | US61744YAL20 | Details | |
| NABORS INDS LTD | US629571AB69 | Details | |
| US62952EAE77 | US62952EAE77 | Details | |
| NYU HOSPS CTR | US62952EAB39 | Details | |
| NTT 4372 27 JUL 27 | US62954WAK18 | Details | |
| NTT 1162 03 APR 26 | US62954WAC91 | Details | |
| NTT 1591 03 APR 28 | US62954WAD74 | Details | |
| NTT 2065 03 APR 31 | US62954WAE57 | Details |
Understaning NACCO Industries Use of Financial Leverage
NACCO Industries' financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures NACCO Industries' total debt position, including all outstanding debt obligations, and compares it with NACCO Industries' equity. Financial leverage can amplify the potential profits to NACCO Industries' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if NACCO Industries is unable to cover its debt costs.
NACCO Industries, Inc., together with its subsidiaries, engages in the natural resources business. The company was founded in 1913 and is headquartered in Cleveland, Ohio. Nacco Industries operates under Thermal Coal classification in the United States and is traded on New York Stock Exchange. It employs 500 people. Please read more on our technical analysis page.
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Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.Check out the analysis of NACCO Industries Fundamentals Over Time. For information on how to trade NACCO Stock refer to our How to Trade NACCO Stock guide.You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Is Oil, Gas & Consumable Fuels 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 NACCO Industries. If investors know NACCO 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 NACCO Industries listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of NACCO Industries is measured differently than its book value, which is the value of NACCO that is recorded on the company's balance sheet. Investors also form their own opinion of NACCO Industries' value that differs from its market value or its book value, called intrinsic value, which is NACCO Industries' 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 NACCO Industries' market value can be influenced by many factors that don't directly affect NACCO Industries' 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 NACCO Industries' value and its price as these two are different measures arrived at by different means. Investors typically determine if NACCO Industries is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, NACCO Industries' 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.