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Showing posts with label Debt. Show all posts
Showing posts with label Debt. Show all posts
Tuesday, 25 July 2023

China's historical debt binge

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September 2008, pre-Lehman Brothers bankruptcy In September 2008, China's economy was slowing.   The Shanghai stock market had just cras...

How Paying Off Debt Pays Off

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Before 2000 Before 2000, many emerging countries had never seen a period of real financial stability or a healthy credit boom.    Inflation...

Debt Mania and Debt Phobia

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Debts owed by nations Every new crisis seemed to hatch a new way of thinking about debt , depending on who is lending, who is borrowing, fo...
Friday, 27 September 2019

Indebtedness

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We should steer clear of businesses that are highly indebted, since they can negate our estimates of future earnings. Debt improves the r...
Thursday, 25 October 2018

Billionaire Ray Dalio: Don't take on debt until you've asked yourself this question

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Thu, 25 Oct 2018 Many young people are deep in debt: Millennials between the ages of 25 and 34 have an average of $42,000 of debt per pe...
Wednesday, 22 August 2018

Determining the Payback Period. When are borrowings excessive?

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In the balance sheet, the total liabilities exceed the total equity overwhelmingly.   What does this mean? There are 3 possible types of...
Wednesday, 28 March 2018

Total Liabilities and the Debt to Shareholders' Equity ratio

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TOTAL LIABILITIES AND THE DEBT TO SHAREHOLDERS' EQUITY RATIO             Balance Sheet/             Debt to Shareholders' E...

Debt test of Warren Buffett

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3 Quick Tests for a Business with a long-term Durable Competitive Advantage: 1.     Earning Test 2.     Return (Profit) Test and 3...
Tuesday, 25 July 2017

How to calculate the Free Cash Flow to Firm and Free Cash Flow to Shareholders

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There are two definitions of free cash flow , both of which are useful for investors: 1.  Free cash flow to the firm (FCFF) 2.   Free...
Thursday, 20 July 2017

Do you always avoid all companies with large amounts of debt?

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In an ideal world, you will select to invest in companies that produce consistently high returns and have low levels of debt . This is t...
Sunday, 16 July 2017

Measuring a company's debt

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There are lots of ratios which can be used to explain a company's debt position. For most investors the following four will tell what...

Using debt ratios to analyse companies

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The debt measure ratios for five companies. Name   Debt to OPCF   Debt/FCF   Interest Cover   Debt/Total Asset A          7.8       ...
Thursday, 31 December 2015

Prudent financing

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Having a load of debt is not itself a bad thing. Having a loa of debt that cannot be easily financed by the cash flow of the business is ...
Monday, 24 February 2014

Change in Debt by Borrower Age (auto loans, student loans, credit card and mortgage debts)

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A couple of things stand out. First, overall growth in debt remains considerably more muted in 2013 than it was in 2006, with the excep...
Tuesday, 30 July 2013

The more debt you take on, the higher the risk

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The higher the net gearing figure, the riskier the investment becomes.  This is basically because debt has to be paid back no matter what ha...
Sunday, 23 December 2012

What are the 3 financial risks in an investment?

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What causes financial risks in an investment? 1.  Excessive debt "Only when the tide goes out do you discover who's been swimm...
Friday, 26 October 2012

Leverage

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Using OPM (other people's money) to make money is smart business as long as the company doesn't go over its head in debt. From the...
Sunday, 24 June 2012

Corporate Finance - Factors that Influence a Company's Capital-Structure Decision

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The primary factors that influence a company's capital-structure decision are: 1.Business risk 2.Company's tax exposure 3...