“Secured Net Leverage Ratio” shall be defined as the ratio of (a)(x) Consolidated Funded Indebtedness as of such date that is secured by a Lien on any assets of Parent and its Restricted Subsidiaries minus (y) Unencumbered Balance Sheet Cash as of such date to (b) Consolidated Adjusted Pro Forma EBITDA for the most …
What is secured net leverage?
Secured Net Leverage Ratio means, as of any date, the ratio of (a) Total Net Debt on such date that is secured by a Lien to (b) EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date.
What is senior secured leverage ratio?
Senior Secured Leverage Ratio: The senior secured leverage ratio is defined as consolidated debt that is secured by a lien less unrestricted cash and cash equivalents to Adjusted EBITDA.
What is net leverage ratio?
Net debt leverage ratio is a key financial measure that is used by management to assess the borrowing capacity of the Company. The Company has defined its net debt leverage ratio as net debt (total principal debt outstanding less unrestricted cash) divided by adjusted EBITDA for the trailing twelve month period.
What is a good gross leverage ratio?
Understanding the Gross Leverage Ratio
The ideal gross leverage ratio depends on what type of insurance a company is underwriting. However, the desired range typically falls below 5.0 for property insurers and 7.0 for liability insurers.
How is leverage calculated?
Leverage = total company debt/shareholder’s equity.
Count up the company’s total shareholder equity (i.e., multiplying the number of outstanding company shares by the company’s stock price.) Divide the total debt by total equity. The resulting figure is a company’s financial leverage ratio.
Can you have negative net debt?
A negative net debt implies that the company possesses more cash and cash equivalents than its financial obligations and is hence more financially stable. … However, since it’s common for companies to have more debt than cash, investors must compare the net debt of a company with other companies in the same industry.
Is leverage good or bad?
Leverage is neither inherently good nor bad. Leverage amplifies the good or bad effects of the income generation and productivity of the assets in which we invest. Be aware of the potential impact of leverage inherent in your investments, both positive and negative, and the volatility therein.
What is a bad leverage ratio?
Typically, a D/E ratio greater than 2.0 indicates a risky scenario for an investor; however, this yardstick can vary by industry. Businesses that require large capital expenditures (CapEx), such as utility and manufacturing companies, may need to secure more loans than other companies.
What is high leverage?
When one refers to a company, property, or investment as “highly leveraged,” it means that item has more debt than equity. The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment.
What is a good net debt ratio?
The optimal debt-to-equity ratio will tend to vary widely by industry, but the general consensus is that it should not be above a level of 2.0. While some very large companies in fixed asset-heavy industries (such as mining or manufacturing) may have ratios higher than 2, these are the exception rather than the rule.