Does Southern (NYSE:SO) Have A Healthy Balance Sheet?
Does Southern (NYSE:SO) Have A Healthy Balance Sheet?
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' 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. As with many other companies The Southern Company (NYSE:SO) makes use of debt. But is this debt a concern to shareholders?
当我们考虑一家公司的风险时,经常要看它的债务使用情况,因为过量的债务可能导致破产。正如许多其他公司一样,南方公司(NYSE:SO)利用债务。但是这种债务会给股东带来担忧吗?
When Is Debt A Problem?
什么时候负债才是一个问题?
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 frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. 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. When we think about a company's use of debt, we first look at cash and debt together.
债务是帮助企业成长的工具,但如果企业无力偿还债权人,那么它就存在于债权人的威胁之下。在最坏的情况下,如果有公司无法偿还其债权人,那么它就可能破产。然而,更频繁(但仍然代价高昂)的情况是,公司必须以大大降价的价格发行股票,永久稀释股东的利益,以强化其资产负债表。通过取代稀释,债务可能是需要大量资本投资且回报率高的企业的极佳工具。当我们考虑一家公司的债务使用情况时,首先要考虑现金和债务。
What Is Southern's Debt?
南方公司的债务是多少?
The image below, which you can click on for greater detail, shows that at June 2024 Southern had debt of US$64.0b, up from US$60.8b in one year. Net debt is about the same, since the it doesn't have much cash.
下图是南方公司截至2024年6月的债务,高达640亿美元,比一年前的608亿美元增加。净债务大致相同,因为现金不多。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240815/0-a938c0f9cf0caaf83b1b0e3a7396f31b-0-c4123b3705c3b7f7968552d08faf2659.png/big)
How Healthy Is Southern's Balance Sheet?
从最近的资产负债表可以看出,南方公司有120亿美元的负债到期,还有938亿美元的负债到期。相对地,它有11.5亿美元的现金和42.8亿美元的应收款项到期,这些款项在12个月内到期。因此,南方公司的负债总额比其现金和短期应收款项的组合高出1004亿美元。
We can see from the most recent balance sheet that Southern had liabilities of US$12.0b falling due within a year, and liabilities of US$93.8b due beyond that. Offsetting this, it had US$1.15b in cash and US$4.28b in receivables that were due within 12 months. So its liabilities total US$100.4b more than the combination of its cash and short-term receivables.
鉴于这种逆差实际上比公司巨大的市值954亿美元还要高,我们认为股东们真的应该像父母第一次看孩子骑自行车一样关注南方公司的债务水平。如果该公司不得不快速清理其资产负债表,似乎股东们将遭受广泛的稀释。
Given this deficit is actually higher than the company's massive market capitalization of US$95.4b, we think shareholders really should watch Southern's debt levels, like a parent watching their child ride a bike for the first time. In the scenario where the company had to clean up its balance sheet quickly, it seems likely shareholders would suffer extensive dilution.
南方公司的债务与息税前利润、折旧和摊销后利润之比为5.0,其息税前利润覆盖了其利息支出2.9倍。综合起来,这意味着,虽然我们不希望看到债务水平上升,但我们认为它可以应对其当前的杠杆。值得一提的是,南方公司去年EBIt增长了32%。这种增长让公司逐渐变得更具有弹性,从而使其更加能够管理其债务。分析债务水平时,资产负债表是一个显而易见的起点。但最终,业务未来的盈利能力将决定南方公司能否随着时间的推移加强其资产负债表。因此,如果您想了解专业人士的看法,您可能会发现这份有关分析师利润预测的免费报告很有趣。
We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (interest cover). Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.
通过查看公司的净债务与利息、税、折旧、摊销前利润(EBITDA)之比以及它的利息费用(利息覆盖率)可以衡量一个公司的债务负担与收益能力。因此,我们考虑将债务与有无计算折旧和摊销费用的收益相对比。
Southern has a debt to EBITDA ratio of 5.0 and its EBIT covered its interest expense 2.9 times. Taken together this implies that, while we wouldn't want to see debt levels rise, we think it can handle its current leverage. Looking on the bright side, Southern boosted its EBIT by a silky 32% in the last year. Like a mother's loving embrace of a newborn that sort of growth builds resilience, putting the company in a stronger position to manage its debt. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Southern 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.
最后,虽然财务会计可能喜欢会计利润,但债权人只接受冰冷的现金。因此,逻辑的下一步是查看实际自由现金流所匹配的EBIt的比例。在过去三年中,南方公司总共看到大量负面的自由现金流。虽然这可能是为了增长而进行的支出的结果,但它确实使债务更加风险。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow. Over the last three years, Southern 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.
思考南方公司试图将EBIt转换为自由现金流的过程,我们并不热衷。但从好的一面来看,它的EBIt增长率是一个好的迹象,并使我们更加乐观。我们还应该注意到,像南方这样的电力公用事业行业公司通常会在没有问题的情况下使用债务。从更大的角度来看,对我们来说,很清楚南方公司的债务使用正在为公司带来风险。如果一切顺利,可能会有好处,但是这种债务的风险是永久性损失的风险更大。
Our View
我们的观点
Mulling over Southern's attempt at converting EBIT to free cash flow, we're certainly not enthusiastic. But on the bright side, its EBIT growth rate is a good sign, and makes us more optimistic. We should also note that Electric Utilities industry companies like Southern commonly do use debt without problems. Looking at the bigger picture, it seems clear to us that Southern's use of debt is creating risks for the company. If everything goes well that may pay off but the downside of this debt is a greater risk of permanent losses. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should learn about the 3 warning signs we've spotted with Southern (including 1 which is potentially serious) .
当分析债务水平时,资产负债表是显而易见的起点。但最终,每家公司都可能存在资产负债表以外的风险。因此,您应该学习关于南方公司(包括可能很严重的1个)的3个警告信号。
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.
说到底,有时候更容易集中精力关注根本不需要债务的公司。读者可以免费访问零净债务增长股票列表。
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