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 KAR Auction Services Inc. (NYSE:KAR) rose by 50.78%. Before having a look at the importance of debt, let's look at how much debt KAR Auction Services has.
KAR Auction Services's Debt
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According to the KAR Auction Services’s most recent financial statement as reported on August 5, 2020, total debt is at $2.63 billion, with $1.86 billion in long-term debt and $769.90 million in current debt. Adjusting for $968.50 million in cash-equivalents, the company has a net debt of $1.66 billion.
Investors look at the debt-ratio to understand how much financial leverage a company has. KAR Auction Services has $6.49 billion in total assets, therefore making the debt-ratio 0.4. 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. For example, a debt ratio of 40% might be higher for one industry, whereas normal for another.
Why Investors Look At Debt?
Debt is an important factor in the capital structure of a company, and can help it attain growth. Debt usually has a relatively lower financing cost than equity, which makes it an attractive option for executives.
Interest-payment obligations can impact the cash-flow of the company. Having financial leverage also allows companies to use additional capital for business operations, allowing equity owners to retain excess profit, generated by the debt capital.
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.