Social Media Venture SOCGEN Bond
The current Long Term Debt is estimated to decrease to about 526.4 K. The current Short and Long Term Debt is estimated to decrease to about 540.2 K With a high degree of financial leverage come high-interest payments, which usually reduce Social Media's Earnings Per Share (EPS).
The Social Media's current Change To Liabilities is estimated to increase to about 48.7 K, while Total Current Liabilities is projected to decrease to under 212.4 K. Check out the analysis of Social Media Fundamentals Over Time. | Popular Name | Social Media SOCGEN 1488 14 DEC 26 |
| Specialization | Internet Content & Information |
| Equity ISIN Code | US8336261040 |
| Bond Issue ISIN Code | US83368RAZ55 |
| S&P Rating | Others |
| Maturity Date | Others |
| Issuance Date | Others |
Social Media Venture Outstanding Bond Obligations
Understaning Social Media Use of Financial Leverage
Understanding the composition and structure of Social Media'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 Social Media'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 | ||
| Long Term Debt | 651.7 K | 526.4 K | |
| Short and Long Term Debt | 680.5 K | 540.2 K | |
| Short Term Debt | 680.5 K | 540.2 K |
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Check out the analysis of Social Media Fundamentals Over Time. You can also try the AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
Is Internet Content & Information 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 Social Media. If investors know Social 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 Social Media 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) | Quarterly Revenue Growth (0.43) | Return On Assets (0.28) |
The market value of Social Media Venture is measured differently than its book value, which is the value of Social that is recorded on the company's balance sheet. Investors also form their own opinion of Social Media's value that differs from its market value or its book value, called intrinsic value, which is Social Media'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 Social Media's market value can be influenced by many factors that don't directly affect Social Media'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 Social Media's value and its price as these two are different measures arrived at by different means. Investors typically determine if Social Media is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Social Media'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.