How much will Applied Industrial owe in September?

AIT
 Stock
  

USD 99.86  2.04  2.00%   

Applied Industrial is scheduled to announce its earnings today. The next fiscal year end is expected on the 16th of August 2022. The stock is currently undergoing an active upward rally. Applied Industrial Return on Investment is comparatively stable at the moment as compared to the past year. Applied Industrial reported Return on Investment of 13.36 in 2021. Revenue to Assets is likely to gain to 1.95 in 2022, whereas Average Assets are likely to drop slightly above 2.3 B in 2022. While some of us are becoming more enthusiastic about industrials space, let's review Applied Industrial Technologies in greater detail to make a better estimate of its debt utilization.
Published over a month ago
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Applied Industrial has 721.36 M in debt with debt to equity (D/E) ratio of 0.66, which is OK given its current industry classification. The entity has a current ratio of 2.73, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Debt can assist Applied Industrial until it has trouble settling it off, either with new capital or with free cash flow. So, Applied Industrial'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 Applied Industrial sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Applied to invest in growth at high rates of return. When we think about Applied Industrial's use of debt, we should always consider it together with cash and equity.
Applied Industrial financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Applied Industrial, including all of Applied Industrial's 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 Applied Industrial assets, the company is considered highly leveraged. Understanding the composition and structure of overall Applied Industrial debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

How important is Applied Industrial's Liquidity

Applied Industrial financial leverage refers to using borrowed capital as a funding source to finance Applied Industrial Technologies ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Applied Industrial financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Applied Industrial's total debt and its cash.

How does Applied utilize its cash?

To perform a cash flow analysis of Applied Industrial, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Applied Industrial is receiving and how much cash it distributes out in a given period. The Applied Industrial cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Breaking down the case for Applied Industrial

The firm reported the last year's revenue of 3.65 B. Total Income to common stockholders was 237.54 M with profit before taxes, overhead, and interest of 942.92 M.

Liabilities Breakdown

454 M
Current Liabilities
865.8 M
Long-Term Liabilities
Total Liabilities1.32 Billion
Current Liabilities454.05 Million
Long-Term Liabilities865.76 Million

Will Applied Industrial newest gain continue?

Newest Market Risk Adjusted Performance is up to 0.03. Price may drop again. Applied Industrial Technologies has relatively low volatility with skewness of -0.16 and kurtosis of 0.52. However, we advise all investors to independently investigate Applied Industrial Technologies to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Applied Industrial's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Applied Industrial's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Applied Industrial Implied Volatility

Applied Industrial's implied volatility exposes the market's sentiment of Applied Industrial Technologies stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Applied Industrial's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Applied Industrial stock will not fluctuate a lot when Applied Industrial's options are near their expiration.

Our Bottom Line On Applied Industrial

Whereas other companies within the industrial distribution industry are still a little expensive, even after the recent corrections, Applied Industrial may offer a potential longer-term growth to private investors. The inconsistency in the assessment between current Applied valuation and our trade advice on Applied Industrial is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Applied Industrial.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Applied Industrial Technologies. Please refer to our Terms of Use for any information regarding our disclosure principles.

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