These 4 Measures Indicate That Lincoln Electric Holdings (NASDAQ:LECO) Is Using Debt Reasonably Well
These 4 Measures Indicate That Lincoln Electric Holdings (NASDAQ:LECO) Is Using Debt Reasonably Well
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that Lincoln Electric Holdings, Inc. (NASDAQ:LECO) does have debt on its balance sheet. But should shareholders be worried about its use of debt?
沃伦·巴菲特曾说:“波动性与风险并不是同义词。”因此,智慧型投资者知道,债务是破产常常涉及的因素之一,在评估公司风险时非常重要。我们注意到纳斯达克股票代码为LECO的Lincoln Electric Holdings,Inc. 的负债表上确实存在债务。但股东们是否应该担心它的债务使用呢?
When Is Debt Dangerous?
债务何时有危险?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.
如果一个企业没有足够的新资本或自由现金流来偿还债务,那么债务在帮助公司之余也会危及公司。最坏的情况下,公司如果无法偿还债务,将会破产。尽管这种情况并不太常见,我们经常看到受债务困扰公司发行债券而长期蚕食股东权益。当然,许多公司使用债务来资助成长,却没有任何负面影响。当我们考虑一个公司使用债务时,我们首先考虑现金和债务。
How Much Debt Does Lincoln Electric Holdings Carry?
Lincoln Electric Holdings负债多少?
The chart below, which you can click on for greater detail, shows that Lincoln Electric Holdings had US$1.10b in debt in June 2024; about the same as the year before. On the flip side, it has US$272.7m in cash leading to net debt of about US$832.0m.
下面的图表(可以单击放大)显示,截至2024年6月,Lincoln Electric Holdings负债11亿美元,与前一年基本相同。相反,它有2727万美元的现金,最终净负债约为8320万美元。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240810/0-bc9feb330033f312d7f0984c29789f68-0-bd016d2c6dc389dca6250e299810a241.png/big)
How Strong Is Lincoln Electric Holdings' Balance Sheet?
Lincoln Electric Holdings财务状况如何?
Zooming in on the latest balance sheet data, we can see that Lincoln Electric Holdings had liabilities of US$783.6m due within 12 months and liabilities of US$1.32b due beyond that. On the other hand, it had cash of US$272.7m and US$600.3m worth of receivables due within a year. So its liabilities total US$1.23b more than the combination of its cash and short-term receivables.
重点关注最新的资产负债表数据,我们可以看到Lincoln Electric Holdings在未来12个月内应付的负债为7.836亿美元,在未来的时间内应付的负债为13.2亿美元。另一方面,它有2727万美元的现金和6003万美元的应收账款。因此,其负债总额比其现金和短期应收账款组合多1.23亿美元。
Given Lincoln Electric Holdings has a humongous market capitalization of US$10.7b, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse.
鉴于Lincoln Electric Holdings市值达到107亿美元,这种负债并不会对它带来太大的威胁。但话说回来,我们当然要继续关注它的资产负债表,以防情况恶化。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
为了衡量公司相对于其收益的债务情况,我们计算其净负债除以利息、税项、折旧和摊销前收益(EBITDA)和其利息支出除以利息前收益(EBIT)的比例(其利息覆盖率)。这种方法的优点是,我们既考虑了债务的绝对量(净负债与 EBITDA),又考虑到了与该债务相关的实际利息支出(其利息覆盖率)。
Lincoln Electric Holdings has a low net debt to EBITDA ratio of only 1.0. And its EBIT covers its interest expense a whopping 18.4 times over. So we're pretty relaxed about its super-conservative use of debt. Also good is that Lincoln Electric Holdings grew its EBIT at 13% over the last year, further increasing its ability to manage debt. 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 Lincoln Electric Holdings can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Lincoln Electric Holdings的净负债/ EBITDA比率仅为1.0。而其利息支出每18.4次就被利润覆盖了。所以,我们对它超级保守的债务使用感到相当放心。Lincoln Electric Holdings去年的EBIt增长了13%,这也是一个不错的消息,进一步提高了公司管理债务的能力。当你分析债务时,显然需要重点关注其资产负债表。但最终,业务的未来盈利能力将决定Lincoln Electric Holdings是否能够随着时间的推移加强其资产负债表。因此,如果您关注未来,请查看此免费报告,其中显示了分析师的利润预测。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. So we always check how much of that EBIT is translated into free cash flow. During the last three years, Lincoln Electric Holdings produced sturdy free cash flow equating to 69% of its EBIT, about what we'd expect. This cold hard cash means it can reduce its debt when it wants to.
最终决定公司无法用纸质收益来支付债务,需要的是冰冷现金。因此,我们始终检查EBIt转换为自由现金流的数量。在过去的三年中,Lincoln Electric Holdings产生了强有力的自由现金流,相当于其EBIt的69%,与我们的预期相当。这些冰冷的现金意味着它可以在需要时减少债务。
Our View
我们的观点
Lincoln Electric Holdings's interest cover suggests it can handle its debt as easily as Cristiano Ronaldo could score a goal against an under 14's goalkeeper. And the good news does not stop there, as its conversion of EBIT to free cash flow also supports that impression! Zooming out, Lincoln Electric Holdings seems to use debt quite reasonably; and that gets the nod from us. While debt does bring risk, when used wisely it can also bring a higher return on equity. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 1 warning sign for Lincoln Electric Holdings that you should be aware of before investing here.
Lincoln Electric Holdings的利息覆盖率表明,它能够像Cristiano Ronaldo对阵U14守门员一样轻松处理其债务。好消息不仅如此,它将EBIt转换为自由现金流的能力也支持了这一印象!总的来说,Lincoln Electric Holdings的债务使用方式相当合理,这也得到了我们的认可。虽然债务确实带来了风险,但使用得当,它也可以带来更高的净资产回报率。毫无疑问,我们从资产负债表中学到了最多有关债务的信息。但最终,每个公司都可能存在超出资产负债表的风险。例如,我们已经发现了1个Lincoln Electric Holdings的警示信号,您在投资之前应该注意到。
Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.
当然,如果您是那种喜欢购买没有债务负担的股票的投资者,那么不要犹豫,立即发现我们独家的净现金增长股票列表。
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