【last day on earth survival mod apk unlimited coins】What does Powerlong Real Estate Holdings Limited’s (HKG:1238) Balance Sheet Tell Us About Its Future?
Investors are always looking for growth in small-cap stocks like Powerlong Real Estate Holdings Limited (
HKG:1238
),last day on earth survival mod apk unlimited coins with a market cap of HK$15b. However, an important fact which most ignore is: how financially healthy is the business? So, understanding the company’s financial health becomes vital, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. Here are few basic financial health checks you should consider before taking the plunge. However, given that I have not delve into the company-specifics, I’d encourage you to
dig deeper yourself into 1238 here
.
How much cash does 1238 generate through its operations?
1238 has built up its total debt levels in the last twelve months, from CN¥32b to CN¥44b , which accounts for long term debt. With this growth in debt, 1238’s cash and short-term investments stands at CN¥13b for investing into the business. Moreover, 1238 has generated cash from operations of CN¥2.0b during the same period of time, resulting in an operating cash to total debt ratio of 4.5%, indicating that 1238’s operating cash is not sufficient to cover its debt. This ratio can also be a sign of operational efficiency as an alternative to return on assets. In 1238’s case, it is able to generate 0.045x cash from its debt capital.
Does 1238’s liquid assets cover its short-term commitments?
At the current liabilities level of CN¥47b, it appears that the company has been able to meet these commitments with a current assets level of CN¥60b, leading to a 1.3x current account ratio. For Real Estate companies, this ratio is within a sensible range since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
SEHK:1238 Historical Debt, March 1st 2019
Can 1238 service its debt comfortably?
1238 is a highly-leveraged company with debt exceeding equity by over 100%. This is not unusual for small-caps as debt tends to be a cheaper and faster source of funding for some businesses. We can test if 1238’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For 1238, the ratio of 5.08x suggests that interest is appropriately covered, which means that lenders may be less hesitant to lend out more funding as 1238’s high interest coverage is seen as responsible and safe practice.
Next Steps:
Although 1238’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. Since there is also no concerns around 1238’s liquidity needs, this may be its optimal capital structure for the time being. This is only a rough assessment of financial health, and I’m sure 1238 has company-specific issues impacting its capital structure decisions. I suggest you continue to research Powerlong Real Estate Holdings to get a better picture of the small-cap by looking at:
Story continues
Future Outlook
: What are well-informed industry analysts predicting for 1238’s future growth? Take a look at our
free research report of analyst consensus
for 1238’s outlook.
Historical Performance
: What has 1238’s returns been like over the past? Go into more detail in the past track record analysis and take a look at
the free visual representations of our analysis
for more clarity.
Other High-Performing Stocks
: Are there other stocks that provide better prospects with proven track records? Explore our
free list of these great stocks here
.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at
. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
View comments
(责任编辑:Leisure)
- ·Global 5G infrastructure market size to reach USD 47.6 Billion by 2027
- ·Riverdale recap: A fog forces some serious conversations
- ·Over 900 Retailers Now Accepting Bitcoin Cash
- ·British manufacturing barely grows in May as EU referendum approaches - PMI
- ·Patrick Downey Is The President of Orezone Gold Corporation (CVE:ORE) And They Just Spent US$108k On Shares
- ·Italy Is Heading for Recession in 2019. Here’s Why
- ·READ NOW: Monteverde & Associates PC Launches an Investigation of the Board of Directors and Officers of Community First Bank– CMYF
- ·Why CF Industries Holdings, Inc. (NYSE:CF) Is A Dividend Rockstar
- ·Sick of Roaming Fees? Now Your Carrier Is Hurting Too
- ·Tesla and Akamai Technologies tumble while Cabot Oil rises
- ·Three 3D-printed coronavirus-fighting products companies are making
- ·Last-second basket caps Bucknell charge to defeat Army 64-63
- ·This Custom Lancia Aurelia Outlaw Is the Most Unlikely Restomod
- ·Whitney Houston's death: Wendy Williams breaks down -- VIDEO
- ·LIVE BLOG: How businesses are responding to coronavirus outbreak
- ·Top 5 Things to Know in the Market on Wednesday
- ·BRIEF-Xinjiang Sayram Modern Agriculture's Controlling Shareholder To Sell 29 Pct Stake
- ·Coral Gables Office Building Trades for Nearly $2 Million
- ·Comtech Augments Tactical Communications With COMET Launch
- ·EC allows RBI to announce new bank licences