Ferroglobe PLC 55336VAG5 Bond

GSM Stock  USD 4.22  0.06  1.40%   
Ferroglobe PLC holds a debt-to-equity ratio of 0.959. At this time, Ferroglobe PLC's Debt To Assets are very stable compared to the past year. As of the 31st of October 2024, Long Term Debt To Capitalization is likely to grow to 0.27, while Net Debt To EBITDA is likely to drop 0.54. . Ferroglobe PLC's financial risk is the risk to Ferroglobe PLC stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Ferroglobe PLC'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. Ferroglobe PLC'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 Ferroglobe Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Ferroglobe PLC's stakeholders.
For most companies, including Ferroglobe PLC, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Ferroglobe PLC, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Ferroglobe PLC's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
1.0663
Book Value
4.628
Operating Margin
0.0988
Profit Margin
0.0383
Return On Assets
0.0573
At this time, Ferroglobe PLC's Total Current Liabilities is very stable compared to the past year. As of the 31st of October 2024, Non Current Liabilities Total is likely to grow to about 595.1 M, while Liabilities And Stockholders Equity is likely to drop about 1.5 B.
  
Check out the analysis of Ferroglobe PLC Fundamentals Over Time.
To learn how to invest in Ferroglobe Stock, please use our How to Invest in Ferroglobe PLC guide.
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Given the importance of Ferroglobe PLC's capital structure, the first step in the capital decision process is for the management of Ferroglobe PLC 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 Ferroglobe PLC to issue bonds at a reasonable cost.
Popular NameFerroglobe PLC MPLX LP 4875
SpecializationOther Industrial Metals & Mining
Equity ISIN CodeGB00BYW6GV68
Bond Issue ISIN CodeUS55336VAG59
View All Ferroglobe PLC Outstanding Bonds

Ferroglobe PLC Outstanding Bond Obligations

Understaning Ferroglobe PLC Use of Financial Leverage

Leverage ratios show Ferroglobe PLC's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Ferroglobe PLC's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
Last ReportedProjected for Next Year
Long Term Debt223.7 M321.4 M
Short and Long Term Debt50.1 M77.8 M
Short Term Debt59.2 M80 M
Net Debt169.5 M253 M
Short and Long Term Debt Total307.2 M399.8 M
Long Term Debt Total581.2 M439.4 M
Net Debt To EBITDA 0.57  0.54 
Debt To Equity 0.38  0.58 
Interest Debt Per Share 1.69  1.60 
Debt To Assets 0.16  0.21 
Long Term Debt To Capitalization 0.23  0.27 
Total Debt To Capitalization 0.28  0.31 
Debt Equity Ratio 0.38  0.58 
Debt Ratio 0.16  0.21 
Cash Flow To Debt Ratio 0.49  0.36 
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When determining whether Ferroglobe PLC is a strong investment it is important to analyze Ferroglobe PLC's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Ferroglobe PLC's future performance. For an informed investment choice regarding Ferroglobe Stock, refer to the following important reports:
Check out the analysis of Ferroglobe PLC Fundamentals Over Time.
To learn how to invest in Ferroglobe Stock, please use our How to Invest in Ferroglobe PLC guide.
You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Is Diversified Metals & Mining 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 Ferroglobe PLC. If investors know Ferroglobe 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 Ferroglobe PLC 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
0.06
Earnings Share
0.32
Revenue Per Share
8.675
Quarterly Revenue Growth
(0.01)
Return On Assets
0.0573
The market value of Ferroglobe PLC is measured differently than its book value, which is the value of Ferroglobe that is recorded on the company's balance sheet. Investors also form their own opinion of Ferroglobe PLC's value that differs from its market value or its book value, called intrinsic value, which is Ferroglobe PLC'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 Ferroglobe PLC's market value can be influenced by many factors that don't directly affect Ferroglobe PLC'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 Ferroglobe PLC's value and its price as these two are different measures arrived at by different means. Investors typically determine if Ferroglobe PLC is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ferroglobe PLC'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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.