GREY:CHALF - Post by User
Comment by
TheCanadianDudeon Dec 21, 2021 1:38pm
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Post# 34251272
RE:Debt Equity Ratio is 1.37, shares are artificially depressed
RE:Debt Equity Ratio is 1.37, shares are artificially depressedHow Debt impacts Chalice: - Chalice is obviously overleveraged, simply it has too much debt, impeding its ability to make principal and interest payments and to cover operating expenses.
- Being overleveraged typically leads to a downward financial spiral resulting in the need to borrow more.
- Chalice might need to restructure their debt or file for bankruptcy to resolve their overleveraged situation.
- The debt-to-equity ratio (above 68) or the debt-to-total assets ratio. Meaning for every $1 Chalice owns, it owes $68 in DEBT
- Disadvantages of being overleveraged include constrained growth, loss of assets, limitations on further borrowing, and the inability to attract new investors.