Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We note that Hunan Mendale Hometextile Co.,Ltd (SZSE:002397) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.
When Is Debt A Problem?
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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.
View our latest analysis for Hunan Mendale HometextileLtd
What Is Hunan Mendale HometextileLtd's Net Debt?
As you can see below, Hunan Mendale HometextileLtd had CN¥586.9m of debt at September 2022, down from CN¥743.2m a year prior. On the flip side, it has CN¥390.9m in cash leading to net debt of about CN¥196.0m.
SZSE:002397 Debt to Equity History December 14th 2022
How Strong Is Hunan Mendale HometextileLtd's Balance Sheet?
According to the last reported balance sheet, Hunan Mendale HometextileLtd had liabilities of CN¥1.76b due within 12 months, and liabilities of CN¥91.7m due beyond 12 months. On the other hand, it had cash of CN¥390.9m and CN¥444.1m worth of receivables due within a year. So its liabilities total CN¥1.01b more than the combination of its cash and short-term receivables.
Hunan Mendale HometextileLtd has a market capitalization of CN¥3.58b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Hunan Mendale HometextileLtd will need earnings to service that debt. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.
In the last year Hunan Mendale HometextileLtd had a loss before interest and tax, and actually shrunk its revenue by 2.7%, to CN¥2.3b. That's not what we would hope to see.
Caveat Emptor
Over the last twelve months Hunan Mendale HometextileLtd produced an earnings before interest and tax (EBIT) loss. Indeed, it lost CN¥304m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. We would feel better if it turned its trailing twelve month loss of CN¥281m into a profit. So to be blunt we do think it is risky. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 2 warning signs for Hunan Mendale HometextileLtd (1 is a bit concerning!) that you should be aware of before investing here.
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
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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.
沃伦·巴菲特曾说过一句名言:“波动性远非风险的代名词。”因此,很明显,当你考虑任何给定股票的风险时,你需要考虑债务,因为过多的债务会使公司陷入困境。我们注意到 湖南梦黛尔家纺有限公司, Ltd (SZSE: 002397) 的资产负债表上确实有债务。但真正的问题是这笔债务是否使公司面临风险。
债务何时会成为问题?
债务是帮助企业增长的工具,但如果企业无法还清贷方,那么债务就任其摆布。在最坏的情况下,如果公司无法向债权人付款,它可能会破产。但是,更常见(但仍然昂贵)的情况是,公司必须以低廉的股价稀释股东,这样才能控制债务。话虽如此,最常见的情况是公司合理地管理债务,而且对自己有利。当我们考虑公司对债务的使用时,我们首先要同时考虑现金和债务。
查看我们对湖南 Mendale HomeTextileLtd 的最新分析
湖南梦黛尔家纺有限公司的净负债是多少?
如下所示,截至2022年9月,湖南梦黛尔家纺有限公司的债务为5.869亿元人民币,低于去年同期的7.432亿元人民币。另一方面,它拥有3.909亿元人民币的现金,净负债约为1.960亿元人民币。
深交所:002397 债务转股权历史记录 2022 年 12 月 14 日
湖南梦黛尔家纺有限公司的资产负债表有多强?
根据最近公布的资产负债表,湖南梦黛尔家居纺织品有限公司在12个月内到期的负债为17.6亿元人民币,12个月后到期的负债为9170万元人民币。另一方面,它在一年内有3.909亿元人民币的现金和价值4.441亿元人民币的应收账款。因此,其负债总额比现金和短期应收账款总额高出101亿元人民币。
湖南Mendale HomeTextileLtd的市值为35.8亿元人民币,因此,如果有需要,它很可能会筹集资金来改善资产负债表。但是我们肯定想睁大眼睛看看有迹象表明其债务带来了太大风险。在分析债务水平时,资产负债表是显而易见的起点。但是你不能完全孤立地看待债务;因为湖南梦黛尔家纺有限公司需要收入来偿还债务。因此,如果你想进一步了解它的收益,可能值得看看这张长期收益趋势图。
去年,湖南Mendale HomeTextileLtd在利息和税前出现了亏损,其收入实际上减少了2.7%,至23亿元人民币。这不是我们希望看到的。
Caveat Emptor
在过去的十二个月中,湖南Mendale HomeTextileLtd创造了息税前收益(EBIT)亏损。事实上,它在息税前利润水平上损失了3.04亿元人民币。考虑到除上述负债外,我们对公司应该使用如此多的债务没有太大的信心。因此,我们认为其资产负债表有点紧张,尽管并非无法修复。如果它将过去十二个月的2.81亿元人民币亏损转化为利润,我们会感觉好些。因此,坦率地说,我们确实认为这是有风险的。在分析债务水平时,资产负债表是显而易见的起点。但是,并非所有的投资风险都存在于资产负债表内——远非如此。例如,我们发现了 湖南梦黛尔家居纺织品有限公司的 2 个警告信号 (1 有点令人担忧!)在这里投资之前,你应该注意这一点。
如果你有兴趣投资那些可以在没有债务负担的情况下增加利润的企业,那就看看这个 免费的 资产负债表上有净现金的成长型企业名单。
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Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用公正的方法提供基于历史数据和分析师预测的评论,我们的文章无意提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。