Is Aris Water Solutions (NYSE:ARIS) Using Too Much Debt?
Is Aris Water Solutions (NYSE:ARIS) Using Too Much Debt?
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.' 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 can see that Aris Water Solutions, Inc. (NYSE:ARIS) does use debt in its business. But is this debt a concern to shareholders?
由Berkshire Hathaway的Charlie Munger支持的外部基金管理员Li Lu毫不掩饰地表示,“最大的投资风险不是价格波动,而是您是否会遭受永久性的资本损失。”因此,聪明人知道债务(通常涉及破产)是评估公司风险时非常重要的因素。我们可以看到Aris Water Solutions,Inc.(NYSE:ARIS)在业务中确实使用了债务。但是这笔债务是否会引起股东的担忧呢?
Why Does Debt Bring Risk?
为什么债务会带来风险?
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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
当企业无法轻松用自由现金流或以有吸引力的价格筹集资金来履行那些义务时,债务和其他负债会对企业产生风险。资本主义的一部分是“创造性破坏”的过程,在这个过程中,失败的企业无情地被银行家清算。虽然这不太常见,但我们经常看到负债累累的公司因为借贷者强迫它们以困境价格筹集资本而永久性稀释股东。然而,通过取代稀释,债务可以成为需要资金以高回报率投资增长的企业的极其有用的工具。在考虑企业使用多少债务时,第一件要做的事情是查看它的现金和债务。
What Is Aris Water Solutions's Debt?
Aris Water Solutions的债务是多少?
The image below, which you can click on for greater detail, shows that at June 2024 Aris Water Solutions had debt of US$446.6m, up from US$423.9m in one year. However, because it has a cash reserve of US$11.5m, its net debt is less, at about US$435.1m.
下面的图片可以点击以获得更详细的信息,显示Aris Water Solutions在2024年6月有446.6百万美元的债务,较一年前的423.9百万美元增加。但是,由于它有1,150万美元的现金储备,因此其净债务为约435.1万美元。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240820/0-e5c935fcab5928dcf3fb610acef57d01-0-fb6954a4963c1dc2acd8ac0084cd1c4e.png/big)
How Strong Is Aris Water Solutions' Balance Sheet?
Aris Water Solutions的资产负债表有多强?
The latest balance sheet data shows that Aris Water Solutions had liabilities of US$94.9m due within a year, and liabilities of US$580.0m falling due after that. Offsetting these obligations, it had cash of US$11.5m as well as receivables valued at US$106.9m due within 12 months. So it has liabilities totalling US$556.5m more than its cash and near-term receivables, combined.
最新的资产负债表数据显示,Aris Water Solutions有9490万美元的负债到期,这些负债将在一年内到期,580.0百万美元的负债将在此之后到期。抵消这些义务,它有现金1,150万美元以及在12个月内到期的应收款项,价值1,0690万美元。因此,它的负债总额超过了现金和短期应收款项,合计为5,5650万美元。
This deficit isn't so bad because Aris Water Solutions is worth US$943.1m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution.
这种赤字并不那么糟糕,因为Aris Water Solutions价值943.1百万美元,因此如果需要,它可能可以筹集足够的资本来支撑其资产负债表。但很明显,我们一定要密切检查它能否在未稀释股东权益的情况下管理其债务。
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。
Aris Water Solutions's net debt is sitting at a very reasonable 2.5 times its EBITDA, while its EBIT covered its interest expense just 2.9 times last year. While these numbers do not alarm us, it's worth noting that the cost of the company's debt is having a real impact. It is well worth noting that Aris Water Solutions's EBIT shot up like bamboo after rain, gaining 41% in the last twelve months. That'll make it easier to manage its debt. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Aris Water Solutions 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.
Aris Water Solutions的净债务是其EBITDA的2.5倍,而它的EBIt去年仅覆盖了其利息支出的2.9倍。尽管这些数字并没有让我们担忧,但值得注意的是,公司的债务成本确实产生了真正的影响。需要注意的是,Aris Water Solutions的EBIt在过去12个月中飙升,增长了41%。这将使其更容易处理其债务。毫无疑问,我们从资产负债表中学到的关于债务的大部分内容。但最终,企业的未来盈利能力将决定Aris Water Solutions是否能够随着时间的推移加强其资产负债表。因此,如果您专注于未来,可以查看这份免费报告,其中显示了分析师的利润预测。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. Over the last three years, Aris Water Solutions saw substantial negative free cash flow, in total. While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.
最后,尽管税务局可能喜欢会计利润,但贷款人只接受冰冷的现金。因此,我们明显需要查看EBIt是否导致相应的自由现金流。在过去的三年中,Aris Water Solutions的自由现金流总量相当大且为负。尽管投资者无疑希望在适当的时候扭转这种情况,但这显然意味着它的债务使用更加冒险。
Our View
我们的观点
Aris Water Solutions's conversion of EBIT to free cash flow and interest cover definitely weigh on it, in our esteem. But its EBIT growth rate tells a very different story, and suggests some resilience. When we consider all the factors discussed, it seems to us that Aris Water Solutions is taking some risks with its use of debt. So while that leverage does boost returns on equity, we wouldn't really want to see it increase from here. 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. Case in point: We've spotted 3 warning signs for Aris Water Solutions you should be aware of, and 1 of them doesn't sit too well with us.
Aris Water Solutions的EBIt转换为自由现金流和利息覆盖率确实会影响到它的评价。但是,它的EBIt增长率讲述了完全不同的故事,并表明了一些韧性。当我们考虑到所有讨论的因素时,我们认为Aris Water Solutions在使用债务方面存在一些风险。因此,虽然这种杠杆作用可以提高股本回报率,但我们不想看到它从这里增加。在分析债务水平时,资产负债表是显而易见的起点。然而,并非所有的投资风险都源自资产负债表——远非如此。就拿以下事例来说:我们发现Aris Water Solutions存在3个预警信号,您应该注意其中一个有些不太好。
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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