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 Chart Industries (NASDAQ:GTLS) rose by 44.58%. Before we understand the importance of debt, let us look at how much debt Chart Industries has.
Chart Industries's Debt
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According to the Chart Industries’s most recent balance sheet as reported on July 23, 2020, total debt is at $748.50 million, with $736.00 million in long-term debt and $12.50 million in current debt. Adjusting for $122.50 million in cash-equivalents, the company has a net debt of $626.00 million.
To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering Chart Industries’s $2.45 billion in total assets, the debt-ratio is at 0.31. Generally speaking, a debt-ratio more than one 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 and 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.
However, interest-payment obligations can have an adverse impact on 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.