DXC Technology Bonds
| DXC Stock | USD 19.58 0.21 1.06% |
DXC Technology holds a debt-to-equity ratio of 1.161. At present, DXC Technology's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short and Long Term Debt is expected to grow to about 824.5 M, whereas Short Term Debt is forecasted to decline to about 540.4 M. DXC Technology's financial risk is the risk to DXC Technology stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
DXC Technology'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. DXC Technology'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 DXC Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect DXC Technology's stakeholders.
DXC Technology Quarterly Net Debt |
|
For most companies, including DXC Technology, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running DXC Technology Co 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 1.1948 | Book Value 16.398 | Operating Margin 0.0459 | Profit Margin (0.03) | Return On Assets (0.03) |
Given that DXC Technology'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 DXC Technology 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 DXC Technology to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, DXC Technology is said to be less leveraged. If creditors hold a majority of DXC Technology's assets, the Company is said to be highly leveraged.
At present, DXC Technology's Net Debt is projected to increase significantly based on the last few years of reporting. The current year's Short and Long Term Debt is expected to grow to about 824.5 M, whereas Short Term Debt is forecasted to decline to about 540.4 M. DXC |
DXC Technology Bond Ratings
DXC Technology Co bond ratings play a critical role in determining how much DXC Technology 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 DXC Technology's borrowing costs.| Piotroski F Score | 7 Strong |
| Beneish M Score | -3.87 Unlikely Manipulator |
DXC Technology Debt to Cash Allocation
As DXC Technology Co follows its natural business cycle, the capital allocation decisions will not magically go away. DXC Technology'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 has 5.37 B in debt with debt to equity (D/E) ratio of 1.16, which is OK given its current industry classification. DXC Technology has a current ratio of 1.07, demonstrating that it is not liquid enough and may have problems paying out its financial commitments when the payables are due. Debt can assist DXC Technology until it has trouble settling it off, either with new capital or with free cash flow. So, DXC Technology'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 DXC Technology sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for DXC to invest in growth at high rates of return. When we think about DXC Technology's use of debt, we should always consider it together with cash and equity.DXC Technology Total Assets Over Time
DXC Technology 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 DXC Technology's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of DXC Technology, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a DXC Technology debt ratio should be compared their industry average or other competing firms.DXC Technology Corporate Bonds Issued
DXC Technology issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. DXC Technology uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most DXC bonds can be classified according to their maturity, which is the date when DXC Technology Co 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.
DXC Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning DXC Technology Use of Financial Leverage
DXC Technology financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures DXC Technology'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 DXC Technology assets, the company is considered highly leveraged. Understanding the composition and structure of overall DXC Technology 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 DXC Technology'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 DXC Technology'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 | 6.2 B | 6.5 B | |
| Net Debt | 4 B | 4.2 B | |
| Short Term Debt | 939.5 M | 540.4 M | |
| Long Term Debt | 4.5 B | 3.1 B | |
| Short and Long Term Debt | 450 M | 824.5 M | |
| Long Term Debt Total | 4.5 B | 4.7 B | |
| Net Debt To EBITDA | 4.52 | 4.75 | |
| Debt To Equity | 1.26 | 1.33 | |
| Interest Debt Per Share | 21.87 | 11.06 | |
| Debt To Assets | 0.30 | 0.18 | |
| Long Term Debt To Capitalization | 0.49 | 0.25 | |
| Total Debt To Capitalization | 0.53 | 0.29 | |
| Debt Equity Ratio | 1.26 | 1.33 | |
| Debt Ratio | 0.30 | 0.18 | |
| Cash Flow To Debt Ratio | 0.30 | 0.61 |
Pair Trading with DXC Technology
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 DXC Technology 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 DXC Technology will appreciate offsetting losses from the drop in the long position's value.Moving together with DXC Stock
| 0.66 | G | Genpact Limited Financial Report 8th of May 2024 | PairCorr |
| 0.64 | DMRC | Digimarc | PairCorr |
Moving against DXC Stock
| 0.68 | DTST | Data Storage Corp | PairCorr |
| 0.68 | FIS | Fidelity National Financial Report 25th of April 2024 | PairCorr |
| 0.62 | JFU | 9F Inc Report 21st of May 2024 | PairCorr |
| 0.61 | FI | Fiserv Inc Earnings Call This Week | PairCorr |
| 0.58 | IBM | International Business Earnings Call This Week | PairCorr |
The ability to find closely correlated positions to DXC Technology could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace DXC Technology 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 DXC Technology - 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 DXC Technology Co to buy it.
The correlation of DXC Technology 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 DXC Technology moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if DXC Technology 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 DXC Technology 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 DXC Technology Fundamentals Over Time. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Complementary Tools for DXC Stock analysis
When running DXC Technology's price analysis, check to measure DXC Technology'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 DXC Technology is operating at the current time. Most of DXC Technology's value examination focuses on studying past and present price action to predict the probability of DXC Technology's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move DXC Technology's price. Additionally, you may evaluate how the addition of DXC Technology to your portfolios can decrease your overall portfolio volatility.
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |
Is DXC Technology'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 DXC Technology. If investors know DXC 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 DXC Technology 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 2.24 | Earnings Share (1.85) | Revenue Per Share 67.173 | Quarterly Revenue Growth (0.05) | Return On Assets (0.03) |
The market value of DXC Technology is measured differently than its book value, which is the value of DXC that is recorded on the company's balance sheet. Investors also form their own opinion of DXC Technology's value that differs from its market value or its book value, called intrinsic value, which is DXC Technology'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 DXC Technology's market value can be influenced by many factors that don't directly affect DXC Technology'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 DXC Technology's value and its price as these two are different measures arrived at by different means. Investors typically determine if DXC Technology is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, DXC Technology'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.