Leverage Financing Cost Rate
factor.formula
Leverage Financing Cost Rate (TTM):
This formula calculates the leverage financing cost rate for the last 12 months.
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Refers to the various expenses incurred by the company in raising funds for production and operation in the last 12 consecutive months, including interest expenses, exchange gains and losses (if any), bank fees, etc. This value uses the Trailing Twelve Months (TTM) data, which can better reflect the company's recent financial status and financing cost level.
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Refers to the total revenue earned by a company through the sale of goods or provision of services in the most recent 12 consecutive months. This value uses the Trailing Twelve Months (TTM) data, which better reflects the company's recent operating scale and revenue level.
factor.explanation
The leverage financing cost rate is a key indicator to measure the efficiency of a company's use of debt financing. The higher the ratio, the higher the financial cost the company bears to obtain operating income, the greater the financial risk may be, but it may also mean that the company uses financial leverage more aggressively to increase its earnings. Conversely, a lower leverage financing cost rate usually means that the company's financial burden is lighter, but it may also mean that the company does not fully utilize financial leverage. Investors need to comprehensively consider factors such as industry characteristics, company development stage and market environment to conduct in-depth analysis of this indicator.
Changes in this indicator can reflect changes in the company's financing costs and adjustments to the company's financial strategy. For example, if a company still maintains a high leverage financing cost rate when market interest rates rise, it may mean that the company's financing cost pressure has increased; conversely, if the company successfully reduces this ratio, it may indicate that the company has made progress in controlling financing costs.
In addition, this indicator can also be used in combination with other financial indicators, such as debt-to-asset ratio, interest coverage ratio, etc., to more comprehensively assess the company's financial health and risk level.