But at least it has CA$4.18m on the balance sheet to spend on growth, near-term. Indeed, in that time it burnt through CA$794k of cash and made a loss of CA$6.2m. And we do note that D-BOX Technologies had an earnings before interest and tax (EBIT) loss, over the last year. Statistically speaking companies that lose money are riskier than those that make money. Over 12 months, D-BOX Technologies made a loss at the EBIT level, and saw its revenue drop to CA$11m, which is a fall of 57%. But on the other hand it also has CA$9.13m in cash, leading to a CA$4.18m net cash position. You can click the graphic below for the historical numbers, but it shows that as of March 2021 D-BOX Technologies had CA$4.95m of debt, an increase on CA$4.03m, over one year. View our latest analysis for D-BOX Technologies What Is D-BOX Technologies's Net Debt? The first step when considering a company's debt levels is to consider its cash and debt together. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. But is this debt a concern to shareholders? Why Does Debt Bring Risk? As with many other companies D-BOX Technologies Inc. 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.
0 Comments
Leave a Reply. |