Precision Optics, Current Debt
| POCI Stock | 5.00 0.21 4.03% |
As of now, Precision Optics,'s Debt To Equity is increasing as compared to previous years. The Precision Optics,'s current Debt To Assets is estimated to increase to 0.21, while Short and Long Term Debt is projected to decrease to under 815.9 K. With a high degree of financial leverage come high-interest payments, which usually reduce Precision Optics,'s Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.20077033 | Current Value 0.21 | Quarterly Volatility 0.04149785 |
Precision |
Precision Optics, Financial Rating
Precision Optics, financial ratings play a critical role in determining how much Precision Optics, 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 Precision Optics,'s borrowing costs.| Piotroski F Score | 2 | Frail | View |
| Beneish M Score | (2.49) | Unlikely Manipulator | View |
Precision Optics, Total Assets Over Time
Precision Optics, Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Precision Optics, 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.Precision Optics, Debt Ratio | 21.0 |
Precision Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Precision Optics, Use of Financial Leverage
Understanding the composition and structure of Precision Optics,'s debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Precision Optics,'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 | 3.4 M | 3.6 M | |
| Net Debt | 3 M | 3.2 M | |
| Short Term Debt | 1.7 M | 1.8 M | |
| Short and Long Term Debt | 1.3 M | 815.9 K | |
| Long Term Debt | 1.9 M | 1.6 M | |
| Net Debt To EBITDA | (1.21) | (1.15) | |
| Debt To Equity | 0.34 | 0.35 | |
| Interest Debt Per Share | 0.60 | 0.57 | |
| Debt To Assets | 0.20 | 0.21 | |
| Long Term Debt To Capitalization | 0.16 | 0.17 | |
| Total Debt To Capitalization | 0.25 | 0.26 | |
| Debt Equity Ratio | 0.34 | 0.35 | |
| Debt Ratio | 0.20 | 0.21 | |
| Cash Flow To Debt Ratio | (0.79) | (0.83) |
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When determining whether Precision Optics, offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Precision Optics,'s financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Precision Optics, Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Precision Optics, Stock:Check out the analysis of Precision Optics, Fundamentals Over Time. For more detail on how to invest in Precision Stock please use our How to Invest in Precision Optics, guide.You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
Is Health Care Equipment & Supplies 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 Precision Optics,. If investors know Precision 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 Precision Optics, listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share (0.62) | Revenue Per Share 3.148 | Quarterly Revenue Growth (0.06) | Return On Assets (0.09) | Return On Equity (0.27) |
The market value of Precision Optics, is measured differently than its book value, which is the value of Precision that is recorded on the company's balance sheet. Investors also form their own opinion of Precision Optics,'s value that differs from its market value or its book value, called intrinsic value, which is Precision Optics,'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 Precision Optics,'s market value can be influenced by many factors that don't directly affect Precision Optics,'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 Precision Optics,'s value and its price as these two are different measures arrived at by different means. Investors typically determine if Precision Optics, is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Precision Optics,'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.