Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We note that Konka Group Co., Ltd. (SZSE:000016) 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 and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.
See our latest analysis for Konka Group
What Is Konka Group's Net Debt?
You can click the graphic below for the historical numbers, but it shows that Konka Group had CN¥21.7b of debt in June 2022, down from CN¥25.9b, one year before. However, it does have CN¥5.93b in cash offsetting this, leading to net debt of about CN¥15.8b.
SZSE:000016 Debt to Equity History September 15th 2022
How Strong Is Konka Group's Balance Sheet?
We can see from the most recent balance sheet that Konka Group had liabilities of CN¥17.7b falling due within a year, and liabilities of CN¥11.3b due beyond that. On the other hand, it had cash of CN¥5.93b and CN¥8.86b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥14.1b.
Given this deficit is actually higher than the company's market capitalization of CN¥10.2b, we think shareholders really should watch Konka Group's debt levels, like a parent watching their child ride a bike for the first time. Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Konka Group 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 Konka Group had a loss before interest and tax, and actually shrunk its revenue by 19%, to CN¥44b. That's not what we would hope to see.
Caveat Emptor
Not only did Konka Group's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost a very considerable CN¥3.1b at the EBIT level. Considering that alongside the liabilities mentioned above make us nervous about the company. It would need to improve its operations quickly for us to be interested in it. Not least because it burned through CN¥4.9b in negative free cash flow over the last year. That means it's on the risky side of things. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 4 warning signs for Konka Group (3 are a bit concerning!) that you should be aware of before investing here.
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
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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.
马克斯说得很好,他不是担心股价波动,而是我担心的是永久亏损的可能性……我认识的每个实际投资者都担心。当你考察一家公司的风险有多大时,考虑它的资产负债表是很自然的,因为当一家企业倒闭时,债务往往会涉及到它。我们注意到康佳集团有限公司。(SZSE:000016)的资产负债表上确实有债务。但真正的问题是,这笔债务是否让该公司面临风险。
什么时候债务是个问题?
当一家企业无法轻松履行这些义务时,债务和其他债务就会变得有风险,无论是通过自由现金流还是通过以有吸引力的价格筹集资本。最终,如果公司不能履行其偿还债务的法定义务,股东可能会一无所有地离开。尽管这并不常见,但我们确实经常看到负债累累的公司永久性地稀释股东的权益,因为贷款人迫使他们以令人沮丧的价格筹集资金。话虽如此,最常见的情况是一家公司对债务管理得相当好--并对自己有利。当我们检查债务水平时,我们首先同时考虑现金和债务水平。
查看我们对康佳集团的最新分析
康佳集团的净负债是多少?
你可以点击下图查看历史数据,但它显示康佳集团在2022年6月的债务为人民币217亿元,低于一年前的人民币259亿元。然而,它确实有59.3亿加元的现金来抵消这一点,导致净债务约为158亿加元。
深交所:000016债转股历史2022年9月15日
康佳集团的资产负债表有多强劲?
从最近的资产负债表可以看出,康佳集团有177亿元人民币的负债在一年内到期,还有113亿元人民币的负债在一年内到期。另一方面,一年内有59.3亿加元现金和88.6亿加元应收账款到期。因此,它的负债超过了现金和(近期)应收账款的总和141亿元。
鉴于这一赤字实际上高于该公司102亿元的市值,我们认为股东们真的应该关注康佳集团的债务水平,就像父母第一次看孩子骑车一样。假设,如果该公司被迫通过以当前股价筹集资金来偿还债务,将需要极大的稀释。毫无疑问,我们从资产负债表中了解到的债务最多。但你不能完全孤立地看待债务,因为康佳集团需要盈利来偿还债务。因此,如果你热衷于了解更多关于它的收益,可能值得查看一下它的长期收益趋势图。
去年,康佳集团息税前亏损,收入缩水19%,至人民币440亿元。这不是我们希望看到的。
告诫买入者
康佳集团不仅在过去12个月中收入下滑,而且息税前收益(EBIT)也出现了负增长。事实上,在息税前利润水平上,它损失了非常可观的人民币31亿元。考虑到上面提到的债务,让我们对公司感到紧张。它需要迅速改善运营,才能让我们对它感兴趣。尤其是因为它在去年消耗了49亿元人民币的负自由现金流。这意味着它在事情中处于危险的一边。当你分析债务时,资产负债表显然是你关注的领域。但归根结底,每家公司都可能包含存在于资产负债表之外的风险。例如,我们发现康佳集团的4个警示标志(3个有点令人担忧!)在这里投资之前你应该意识到这一点。
总而言之,有时候专注于甚至不需要债务的公司会更容易。读者可以访问净债务为零的成长型股票列表100%免费,现在。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。