2023: Has Applied Industrial Technologies’ Debt Use Grown Too Large?

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Applied Industrial Technologies ($NYSE:AIT), a leading industrial parts and service provider, has been a cornerstone of the industrial sector for over a century. But as the company and its industry have evolved, the use of debt has grown exponentially. This raises the question of whether Applied Industrial Technologies has taken on too much debt in recent years. As of the end of 2023, Applied Industrial Technologies has an accumulated debt of over $4 billion. This is a significant amount for a company of its size and industry, and it is certainly cause for concern among investors. In addition to this, the company’s debt to equity ratio is significantly higher than its peers, indicating that it is using more leverage to finance its activities. It is important to note, however, that Applied Industrial Technologies’ debt load is not unsustainable. The company’s revenues have grown steadily in recent years, and its operating margins are healthy.

Moreover, it has sufficient cash reserves to cover its debt obligations in the near future. At the same time, it is important to consider the potential risks associated with Applied Industrial Technologies’ debt use. Should the economy take a turn for the worse, or should the company’s growth slow down, the company could find itself in financial trouble. Therefore, it is important for investors to carefully monitor the company’s debt levels and ensure that it does not become too over-leveraged. Overall, Applied Industrial Technologies’ debt use has certainly grown in recent years, but it does not appear to be excessive. While investors should be aware of the risks associated with increased debt, they can rest assured that the company has a sufficient amount of cash reserves and a stable business model to cover any potential debt obligations in the future.

Share Price

News coverage on Applied Industrial Technologies’ (APPLIED INDUSTRIAL TECHNOLOGIES) debt use has been largely negative as of the time of writing. This was reflected in its stock on Monday, where it opened at $136.3 and closed at $134.4, a decrease of 3.1% from its last closing price of $138.8. Given the company’s current debt usage, it appears that their debt has grown too large for their current financial standing. It is unclear how this situation will be rectified in the next few years, but it is expected that further news coverage will be available as the company attempts to address this issue. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for AIT. More…

Key Ratios Snapshot

Some of the financial key ratios for AIT are shown below. More…

Analysis

At GoodWhale, we have performed a thorough analysis of APPLIED INDUSTRIAL TECHNOLOGIES’ financials. Our Risk Rating shows that it is a medium risk investment in terms of financial and business aspects. Upon further examination of the company’s income sheet and balance sheet, we have detected two risk warnings which may indicate some potential issues with the financial stability of the company. If you would like to take a closer look at our findings, you can register with us to access the full report. More…

Peers

Applied Industrial Technologies Inc is in competition with Wajax Corp, Ohashi Technica Inc, and TAT Technologies Ltd. All four companies are vying for market share in the industrial technologies sector. Applied Industrial Technologies Inc has a strong history of innovation and customer service, which gives it a competitive advantage.

– Wajax Corp ($TSX:WJX)

Wajax is a leading provider of industrial products and services in Canada. With over 100 locations across the country, Wajax serves a wide range of customers in the mining, oil and gas, forestry, construction, transportation, manufacturing, industrial and municipal sectors. The company has a long history of providing quality products and services, and is dedicated to providing its customers with the best possible experience. Wajax has a market cap of 378.35M as of 2022, and a Return on Equity of 15.27%.

– Ohashi Technica Inc ($TSE:7628)

Ohashi Technica Inc is a Japanese company that manufactures and sells machinery and equipment. It has a market capitalization of 18.92 billion as of 2022 and a return on equity of 4.44%. The company’s products include lathes, machining centers, grinders, and other machine tools. It also offers engineering services such as design, development, and consultation.

– TAT Technologies Ltd ($NASDAQ:TATT)

TAT Technologies Ltd is an aerospace and defense company that provides products and services to the aviation, aerospace, and defense industries. The company has a market cap of $56.27 million and a return on equity of -3.57%. TAT Technologies Ltd provides products and services to the aviation, aerospace, and defense industries. The company designs, manufactures, repairs, and overhauls aircraft components and systems. It also provides engineering, technical, and aftermarket services.

Summary

Applied Industrial Technologies (AIT) has come under scrutiny in recent weeks for its growing debt. This has caused some investors to question whether the debt usage is too large for the company. Following this news coverage, the company’s stock price has declined. This raises some red flags for investors, and it is important to evaluate whether AIT has become over-leveraged. Analysts should review the company’s financial statements to see if AIT has overextended itself, or if the debt is an acceptable risk for investors.

Additionally, investors should assess the current and future prospects of the company to determine if the debt is justified. Ultimately, a thorough analysis of AIT will help investors make informed decisions about investing in the company.