Financing cost as a percentage of revenue
factor.formula
Financing cost as a percentage of revenue:
This formula calculates the financing cost to revenue ratio over the last 12 months (rolling).
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Refers to all financial expenses incurred by an enterprise in the last 12 months, including interest expenses, exchange gains and losses, financial institution fees and other costs related to financing activities. Using rolling 12-month data can more accurately reflect the company's recent financing cost level. TTM (Trailing Twelve Months) means rolling 12 months.
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Refers to the total revenue earned by an enterprise through the sale of goods or provision of services in the last 12 months. Using rolling 12-month data can more accurately reflect the company's recent operating scale. TTM (Trailing Twelve Months) means rolling 12 months.
factor.explanation
The ratio of financing cost to revenue not only reflects the financing cost paid by the enterprise to obtain operating income, but also reflects the enterprise's financial management ability and risk tolerance. A high ratio may mean that the enterprise is overly dependent on external financing, or the financing structure is unreasonable, resulting in high financial risks; while a low ratio may mean that the enterprise has high financing efficiency, or the enterprise itself has sufficient cash flow and does not need too much financing. When comparing different enterprises horizontally, the differences in industry characteristics and business models should be considered. This ratio may be high in capital-intensive or cyclical industries. When comparing the same enterprise vertically, the changing trend of this ratio can reflect changes in the financial status of the enterprise.