Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We can see that Jinneng Science&Techology Co.,Ltd (SHSE:603113) does use debt in its business. But is this debt a concern to shareholders?
When Is Debt Dangerous?
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
See our latest analysis for Jinneng Science&TechologyLtd
How Much Debt Does Jinneng Science&TechologyLtd Carry?
The image below, which you can click on for greater detail, shows that at June 2022 Jinneng Science&TechologyLtd had debt of CN¥1.94b, up from CN¥1.75b in one year. However, its balance sheet shows it holds CN¥3.31b in cash, so it actually has CN¥1.37b net cash.
SHSE:603113 Debt to Equity History August 25th 2022
How Healthy Is Jinneng Science&TechologyLtd's Balance Sheet?
Zooming in on the latest balance sheet data, we can see that Jinneng Science&TechologyLtd had liabilities of CN¥5.08b due within 12 months and liabilities of CN¥1.23b due beyond that. On the other hand, it had cash of CN¥3.31b and CN¥1.16b worth of receivables due within a year. So its liabilities total CN¥1.83b more than the combination of its cash and short-term receivables.
While this might seem like a lot, it is not so bad since Jinneng Science&TechologyLtd has a market capitalization of CN¥8.81b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. While it does have liabilities worth noting, Jinneng Science&TechologyLtd also has more cash than debt, so we're pretty confident it can manage its debt safely.
The modesty of its debt load may become crucial for Jinneng Science&TechologyLtd if management cannot prevent a repeat of the 82% cut to EBIT over the last year. Falling earnings (if the trend continues) could eventually make even modest debt quite risky. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Jinneng Science&TechologyLtd can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. While Jinneng Science&TechologyLtd has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Over the last three years, Jinneng Science&TechologyLtd saw substantial negative free cash flow, in total. While that may be a result of expenditure for growth, it does make the debt far more risky.
Summing Up
While Jinneng Science&TechologyLtd does have more liabilities than liquid assets, it also has net cash of CN¥1.37b. So while Jinneng Science&TechologyLtd does not have a great balance sheet, it's certainly not too bad. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. We've identified 3 warning signs with Jinneng Science&TechologyLtd (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
巴菲特(Warren Buffett)曾説過一句名言:波動性遠非風險的代名詞。當我們考慮一家公司的風險有多大時,我們總是喜歡看它對債務的使用,因為債務過重可能導致破產。我們可以看到金能科技股份有限公司(上海證券交易所:603113)確實在其業務中使用債務。但這筆債務對股東來説是一個擔憂嗎?
債務在什麼時候是危險的?
債務是幫助企業發展的一種工具,但如果一家企業無法償還貸款人的債務,那麼它就只能聽從貸款人的擺佈。如果情況真的變得很糟糕,貸款人可以控制業務。然而,一種更常見(但仍然昂貴)的情況是,一家公司必須以低廉的股價稀釋股東的股份,才能控制債務。然而,通過取代稀釋,對於需要資本投資於高回報率增長的企業來説,債務可以成為一個非常好的工具。當考慮一家企業使用了多少債務時,首先要做的是把現金和債務放在一起看。
查看我們對金能科技全息有限公司的最新分析
金能科技股份有限公司揹負着多少債務?
你可以點擊查看更多詳細信息的下圖顯示,截至2022年6月,金能科技全息有限公司的債務為19.4億加元,高於一年內的17.5億加元。然而,其資產負債表顯示,它持有人民幣33.1億元的現金,因此它實際上擁有人民幣13.7億元的淨現金。
上證綜指:603113債轉股歷史2022年8月25日
金能科技的資產負債表有多健康?
放大最新的資產負債表數據,我們可以看到,金能科技全息有限公司有50.8億加元的負債在12個月內到期,超過12個月的負債有12.3億加元到期。另一方面,一年內有33.1億元現金和11.6億元應收賬款到期。因此,它的負債總額為人民幣18.3億元,比現金和短期應收賬款的總和還要多。
雖然這看起來可能很多,但並不是很糟糕,因為金能科技全息有限公司的市值為人民幣88.1億元,因此如果需要的話,它可能會通過籌集資本來加強其資產負債表。但很明顯,我們絕對應該仔細檢查它是否能夠在不稀釋的情況下管理債務。雖然它確實有值得注意的負債,但金能科技全息有限公司的現金也多於債務,因此我們非常有信心它能夠安全地管理其債務。
如果管理層不能防止去年息税前利潤削減82%的情況重演,其適度的債務負擔可能對晉能科技有限公司至關重要。收益下降(如果這種趨勢持續下去)最終可能會使規模不大的債務面臨相當大的風險。當你分析債務時,資產負債表顯然是你關注的領域。但最終,該業務未來的盈利能力將決定金能科技有限公司能否隨着時間的推移加強其資產負債表。因此,如果你想看看專業人士的想法,你可能會發現這份關於分析師利潤預測的免費報告很有趣。
最後,儘管税務人員可能喜歡會計利潤,但貸款人只接受冷硬現金。雖然晉能科技的資產負債表上有淨現金,但它將息税前利潤(EBIT)轉換為自由現金流的能力仍然值得一看,以幫助我們瞭解它正在以多快的速度建立(或侵蝕)現金餘額。在過去的三年裏,金能科技全息有限公司的自由現金流總額為大幅負值。儘管這可能是增長支出的結果,但它確實使債務的風險大得多。
總結
雖然金能科技股份有限公司的負債確實多於流動資產,但它也有13.7億元的淨現金。因此,儘管晉能科技股份有限公司的資產負債表不是很好,但肯定不是太糟糕。毫無疑問,我們從資產負債表中瞭解到的債務最多。然而,並非所有投資風險都存在於資產負債表中--遠非如此。我們已經確定了三個警告信號與晉能科技全息有限公司(至少1家可能是嚴重的)合作,瞭解他們應該是你投資過程的一部分。
歸根結底,關注那些沒有淨債務的公司往往更好。你可以訪問我們的這類公司的特別名單(都有利潤增長的記錄)。這是免費的。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。