Ocean Biomedical Debt
| OCEA Stock | 1.01 0.02 2.02% |
The current year's Net Debt is expected to grow to about 2.2 M, whereas Short and Long Term Debt Total is forecasted to decline to about 1.7 M. With a high degree of financial leverage come high-interest payments, which usually reduce Ocean Biomedical's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.0174 | Current Value 0.0155 | Quarterly Volatility 0.00109332 |
Ocean |
Ocean Biomedical Bond Ratings
Ocean Biomedical financial ratings play a critical role in determining how much Ocean Biomedical 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 Ocean Biomedical's borrowing costs.| Piotroski F Score | 3 | Frail | View |
| Beneish M Score | (5.19) | Unlikely Manipulator | View |
Ocean Biomedical Other Current Liab Over Time
Ocean Biomedical Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Ocean Biomedical 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.Ocean Biomedical Debt Ratio | 1.55 |
Ocean Biomedical Corporate Bonds Issued
Most Ocean bonds can be classified according to their maturity, which is the date when Ocean Biomedical has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Ocean Net Debt
Net Debt |
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Understaning Ocean Biomedical Use of Financial Leverage
Ocean Biomedical's financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures Ocean Biomedical's total debt position, including all outstanding debt obligations, and compares it with Ocean Biomedical's equity. Financial leverage can amplify the potential profits to Ocean Biomedical's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if Ocean Biomedical is unable to cover its debt costs.
| Last Reported | Projected for Next Year | ||
| Net Debt | 2.1 M | 2.2 M | |
| Short and Long Term Debt Total | 1.9 M | 1.7 M | |
| Short and Long Term Debt | 1.9 M | 1.7 M | |
| Short Term Debt | 1.9 M | 1.7 M | |
| Net Debt To EBITDA | (2.19) | (2.08) | |
| Debt To Equity | 0.02 | 0.02 | |
| Interest Debt Per Share | 0.15 | 0.13 | |
| Debt To Assets | 0.02 | 0.02 | |
| Total Debt To Capitalization | 0.02 | 0.02 | |
| Debt Equity Ratio | 0.02 | 0.02 | |
| Debt Ratio | 0.02 | 0.02 | |
| Cash Flow To Debt Ratio | (0.31) | (0.33) |
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Check out the analysis of Ocean Biomedical Fundamentals Over Time. For information on how to trade Ocean Stock refer to our How to Trade Ocean Stock guide.You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Is Biotechnology 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 Ocean Biomedical. If investors know Ocean 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 Ocean Biomedical listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (2.75) | Return On Assets (6.82) |
The market value of Ocean Biomedical is measured differently than its book value, which is the value of Ocean that is recorded on the company's balance sheet. Investors also form their own opinion of Ocean Biomedical's value that differs from its market value or its book value, called intrinsic value, which is Ocean Biomedical'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 Ocean Biomedical's market value can be influenced by many factors that don't directly affect Ocean Biomedical'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 Ocean Biomedical's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ocean Biomedical is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ocean Biomedical'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.