27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Over the past three months, shares of Tyson Foods Inc. (NYSE:TSN) increased by 10.55%. Before we understand the importance of debt, let's look at how much debt Tyson Foods has.
Tyson Foods's Debt
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Based on Tyson Foods’s balance sheet as of August 3, 2020, long-term debt is at $11.28 billion and current debt is at $750.00 million, amounting to $12.03 billion in total debt. Adjusted for $1.36 billion in cash-equivalents, the company's net debt is at $10.66 billion.
To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering Tyson Foods’s $34.56 billion in total assets, the debt-ratio is at 0.35. Generally speaking, a debt-ratio more than 1 means that a large portion of debt is funded by assets. As the debt-ratio increases, so the does the risk of defaulting on loans, if interest rates were to increase. Different industries have different thresholds of tolerance for debt-ratios. A debt ratio of 40% might be higher for one industry, whereas average for another.
Why Debt Is Important
Besides equity, debt is an important factor in the capital structure of a company, and contributes to its growth. Due to its lower financing cost compared to equity, it becomes an attractive option for executives trying to raise capital.
Interest-payment obligations can impact the cash-flow of the company. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.