Ares Management Current Debt
| ARES Stock | USD 142.27 0.17 0.12% |
Ares Management LP holds a debt-to-equity ratio of 2.65. At this time, Ares Management's Long Term Debt is comparatively stable compared to the past year. Debt To Equity is likely to gain to 11.63 in 2024, whereas Net Debt is likely to drop slightly above 10.4 B in 2024. Ares Management's financial risk is the risk to Ares Management stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Ares Management'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. Ares Management'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 Ares Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Ares Management's stakeholders.
Ares Management Quarterly Net Debt |
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For most companies, including Ares Management, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Ares Management LP 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 13.4144 | Book Value 9.936 | Operating Margin 0.2465 | Profit Margin 0.1286 | Return On Assets 0.0246 |
Given that Ares Management's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Ares Management is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Ares Management to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Ares Management is said to be less leveraged. If creditors hold a majority of Ares Management's assets, the Company is said to be highly leveraged.
At this time, Ares Management's Long Term Debt is comparatively stable compared to the past year. Debt To Equity is likely to gain to 11.63 in 2024, whereas Net Debt is likely to drop slightly above 10.4 B in 2024. Ares |
Ares Management Financial Leverage Rating
Ares Management LP bond ratings play a critical role in determining how much Ares Management 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 Ares Management's borrowing costs.| Piotroski F Score | 5 Healthy |
| Beneish M Score | -2.67 Unlikely Manipulator |
Ares Management LP Debt to Cash Allocation
As Ares Management LP follows its natural business cycle, the capital allocation decisions will not magically go away. Ares Management'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 currently holds 15.76 B in liabilities with Debt to Equity (D/E) ratio of 2.65, implying the company greatly relies on financing operations through barrowing. Ares Management LP has a current ratio of 0.46, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Ares Management until it has trouble settling it off, either with new capital or with free cash flow. So, Ares Management'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 Ares Management LP sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Ares to invest in growth at high rates of return. When we think about Ares Management's use of debt, we should always consider it together with cash and equity.Ares Management Total Assets Over Time
Ares Management 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 Ares Management's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Ares Management, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a an Ares Management debt ratio should be compared their industry average or other competing firms.Ares Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Ares Management Use of Financial Leverage
Ares Management financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Ares Management'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 Ares Management assets, the company is considered highly leveraged. Understanding the composition and structure of overall Ares Management 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 Ares Management'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 Ares Management'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 | 15.8 B | 11.6 B | |
| Net Debt | 14.3 B | 10.4 B | |
| Short Term Debt | 125.2 M | 119 M | |
| Long Term Debt | 15.3 B | 16.1 B | |
| Short and Long Term Debt | 125.2 M | 119 M | |
| Long Term Debt Total | 2 B | 1.7 B | |
| Net Debt To EBITDA | 5.88 | 5.58 | |
| Debt To Equity | 8.32 | 11.63 | |
| Interest Debt Per Share | 90.05 | 110.54 | |
| Debt To Assets | 0.64 | 0.51 | |
| Long Term Debt To Capitalization | 0.89 | 0.63 | |
| Total Debt To Capitalization | 0.89 | 0.63 | |
| Debt Equity Ratio | 8.32 | 11.63 | |
| Debt Ratio | 0.64 | 0.51 | |
| Cash Flow To Debt Ratio | (0.01) | (0.02) |
Ares Management Investors Sentiment
The influence of Ares Management's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Ares. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock market does not have solid backing from leading economists and market statisticians.
Investor biases related to Ares Management's public news can be used to forecast risks associated with an investment in Ares. The trend in average sentiment can be used to explain how an investor holding Ares can time the market purely based on public headlines and social activities around Ares Management LP. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Ares Management's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Ares Management's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Ares Management's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Ares Management.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Ares Management in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Ares Management's short interest history, or implied volatility extrapolated from Ares Management options trading.
Pair Trading with Ares Management
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Ares Management position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ares Management will appreciate offsetting losses from the drop in the long position's value.The ability to find closely correlated positions to Ares Management could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Ares Management when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Ares Management - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Ares Management LP to buy it.
The correlation of Ares Management is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Ares Management moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Ares Management LP moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Ares Management can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of Ares Management Fundamentals Over Time. Note that the Ares Management LP information on this page should be used as a complementary analysis to other Ares Management's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Complementary Tools for Ares Stock analysis
When running Ares Management's price analysis, check to measure Ares Management's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Ares Management is operating at the current time. Most of Ares Management's value examination focuses on studying past and present price action to predict the probability of Ares Management's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Ares Management's price. Additionally, you may evaluate how the addition of Ares Management to your portfolios can decrease your overall portfolio volatility.
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Is Ares Management's industry 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 Ares Management. If investors know Ares 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 Ares Management listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.33) | Dividend Share 3.24 | Earnings Share 2.26 | Revenue Per Share 18.761 | Quarterly Revenue Growth (0.13) |
The market value of Ares Management LP is measured differently than its book value, which is the value of Ares that is recorded on the company's balance sheet. Investors also form their own opinion of Ares Management's value that differs from its market value or its book value, called intrinsic value, which is Ares Management'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 Ares Management's market value can be influenced by many factors that don't directly affect Ares Management'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 Ares Management's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ares Management is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ares Management'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.