Q3 All-Weather Current Financial Leverage

QACTX
 Fund
  

USD 9.34  0.10  1.08%   

Q3 All-Weather's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Q3 All-Weather's financial risk is the risk to Q3 All-Weather 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).
Please see the analysis of Q3 All-Weather Fundamentals Over Time.
  
Given that Q3 All-Weather's debt-to-equity ratio measures a Mutual Fund's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Q3 All-Weather 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 Q3 All-Weather to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Q3 All-Weather is said to be less leveraged. If creditors hold a majority of Q3 All-Weather's assets, the Mutual Fund is said to be highly leveraged.
Given the importance of Q3 All-Weather's capital structure, the first step in the capital decision process is for the management of Q3 All-Weather 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 Q3 All-Weather Tactical to issue bonds at a reasonable cost.

Q3 All-Weather Financial Leverage Rating

Q3 All-Weather Tactical bond ratings play a critical role in determining how much Q3 All-Weather 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 Q3 All-Weather's borrowing costs.

Q3 All-Weather 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 Q3 All-Weather's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Q3 All-Weather, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a Q3 All-Weather debt ratio should be compared their industry average or other competing firms.

Understaning Q3 All-Weather Use of Financial Leverage

Q3 All-Weather financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Q3 All-Weather'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 Q3 All-Weather assets, the company is considered highly leveraged. Understanding the composition and structure of overall Q3 All-Weather 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.
The investment seeks a positive rate of return over a calendar year regardless of market conditions. Q3 All-Weather is traded on NASDAQ Exchange in the United States.
Please read more on our technical analysis page.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Q3 All-Weather without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

Did you try this?

Run Theme Ratings Now

   

Theme Ratings

Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
All  Next Launch Module

Currently Active Assets on Macroaxis

Please see the analysis of Q3 All-Weather Fundamentals Over Time. Note that the Q3 All-Weather Tactical information on this page should be used as a complementary analysis to other Q3 All-Weather's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Complementary Tools for QACTX Mutual Fund analysis

When running Q3 All-Weather Tactical price analysis, check to measure Q3 All-Weather'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 Q3 All-Weather is operating at the current time. Most of Q3 All-Weather's value examination focuses on studying past and present price action to predict the probability of Q3 All-Weather's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Q3 All-Weather's price. Additionally, you may evaluate how the addition of Q3 All-Weather to your portfolios can decrease your overall portfolio volatility.
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Please note, there is a significant difference between Q3 All-Weather's value and its price as these two are different measures arrived at by different means. Investors typically determine Q3 All-Weather value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Q3 All-Weather'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.