APT 0.00% $66.47 afterpay limited

Don't see why increasing funding and interest payments inline...

  1. 102 Posts.
    Don't see why increasing funding and interest payments inline with increase in sales should be a negative. As sales increase each next dollar of sales brings higher profitability and borrowing capacity than the previous dollar.

    Agree that the business will have a negative sensitivity to rising interest rates, like most other businesses do. Again the impact is reduced due to quick pay cycle. A $1000 invested for an average of 5 weeks (average of 4 instalments payable at 2,4,6 & 8 weeks ) My back of envelope calcs suggest each 1% increase in interest rates to reduce net profits by less than 0.1.% of sales or 1.7% of gross revenue.
 
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