Q: The debt to equity of the company is 220% is this not a concern with the higher interest rates?
5i Research Answer:
Interest rates do have an impact to GSY, but it can and does adjust the rates it charges to customer (up to a legal limit) as rates rise. Interest margin is a more important metric (the difference between interest charged to customers and the interest costs the company has). The debt level is high because it is in the business of lending money: this debt also turns over quickly as customers repay loans. Its 2Q results were a record, but it did have charge offs of 9.1%, well within its expected range.