Change rate of financial liabilities (standardized)
factor.formula
Financial Liabilities =
Financial liabilities include interest-bearing debts undertaken by enterprises, which mainly reflect the scale of financing activities carried out by enterprises using financial leverage. These debts have high reliability and transparency in accounting, and little room for profit manipulation. Specifically, they include: short-term loans (bank loans that need to be repaid in the short term, etc.), transactional financial liabilities (financial liabilities held for trading purposes), notes payable (notes payable arising from commercial transactions), non-current liabilities due within one year (long-term debt due within the next year), long-term loans (long-term debt with a term of more than one year) and bonds payable (bonds issued by enterprises).
Average Total Assets =
Average total assets are used to standardize changes in financial liabilities and represent the average size of a company's assets during the reporting period. Using the average rather than the end-of-period value more accurately reflects the level of assets throughout the reporting period, thereby avoiding the bias caused by occasional fluctuations in assets at the end of the period.
Financial liabilities change rate (standardized) =
The calculation formula for the rate of change of financial liabilities (standardized). The numerator is the difference between the financial liabilities in the most recent reporting period and the financial liabilities in the same period of the previous year, reflecting the net increase or decrease in the financial liabilities of the enterprise during the reporting period. The denominator is the average total assets, which standardizes the changes in financial liabilities and eliminates the impact of differences in enterprise size, making the changes in financial leverage of enterprises of different sizes comparable.
The meaning of each parameter in the formula is as follows:
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The total amount of interest-bearing debt assumed by the enterprise, including short-term loans, trading financial liabilities, notes payable, non-current liabilities due within one year, long-term loans and bonds payable.
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The average asset size of the enterprise during the reporting period is calculated as the average of the total assets at the beginning and end of the period.
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Refers to the total amount of an enterprise's financial liabilities at the end of the most recent accounting reporting period.
- :
Refers to the total amount of an enterprise's financial liabilities at the same point in time in the previous fiscal year and the most recent reporting period.
factor.explanation
The financial liabilities change rate (standardized) reflects the changes in the company's debt financing strategy and financial leverage during the reporting period. This indicator has a certain correlation with the company's future profitability and stock returns. On the one hand, if the company supports expansion or investment activities by increasing financial liabilities, it may indicate future profit growth; on the other hand, excessive increase in financial liabilities will also bring higher financial risks. The standardization of this indicator makes the comparison between companies of different sizes more meaningful. Generally speaking, a significant change in this indicator, whether it is a significant increase or a significant decrease, is worthy of investors' attention, because it may indicate a change in the company's future business strategy and risk profile. This indicator can serve as an important reference for assessing the company's financial risk and leverage level, and assist investors in making investment decisions.