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.' 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 Chengdu Road & Bridge Engineering CO.,LTD (SZSE:002628) does use debt in its business. But the more important question is: how much risk is that debt creating?
Why Does Debt Bring Risk?
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. 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. 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.
Check out our latest analysis for Chengdu Road & Bridge EngineeringLTD
What Is Chengdu Road & Bridge EngineeringLTD's Debt?
The image below, which you can click on for greater detail, shows that Chengdu Road & Bridge EngineeringLTD had debt of CN¥1.96b at the end of June 2022, a reduction from CN¥2.28b over a year. However, it does have CN¥342.6m in cash offsetting this, leading to net debt of about CN¥1.62b.
![debt-equity-history-analysis](https://usnewsfile.futunn.com/pic/0-14412257-0-9f2e78693c94c4ae078e3d368f800e68.png/big)
SZSE:002628 Debt to Equity History September 6th 2022
How Strong Is Chengdu Road & Bridge EngineeringLTD's Balance Sheet?
Zooming in on the latest balance sheet data, we can see that Chengdu Road & Bridge EngineeringLTD had liabilities of CN¥2.64b due within 12 months and liabilities of CN¥1.91b due beyond that. On the other hand, it had cash of CN¥342.6m and CN¥2.97b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥1.23b.
This deficit isn't so bad because Chengdu Road & Bridge EngineeringLTD is worth CN¥3.55b, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. When analysing debt levels, the balance sheet is the obvious place to start. But it is Chengdu Road & Bridge EngineeringLTD's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
Over 12 months, Chengdu Road & Bridge EngineeringLTD made a loss at the EBIT level, and saw its revenue drop to CN¥1.5b, which is a fall of 29%. To be frank that doesn't bode well.
Caveat Emptor
Not only did Chengdu Road & Bridge EngineeringLTD's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost CN¥27m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. We would feel better if it turned its trailing twelve month loss of CN¥14m into a profit. So in short it's a really risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. We've identified 2 warning signs with Chengdu Road & Bridge EngineeringLTD (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
馬克斯説得很好,他不是擔心股價波動,而是我擔心的是永久虧損的可能性……我認識的每個實際投資者都擔心。因此,當你評估一家公司的風險有多大時,聰明的投資者似乎知道債務--通常涉及破產--是一個非常重要的因素。我們可以看到成都路橋工程有限公司(SZSE:002628)確實在其業務中使用債務。但更重要的問題是:這筆債務造成了多大的風險?
為什麼債務會帶來風險?
當一家企業無法輕鬆履行這些義務時,債務和其他債務就會變得有風險,無論是通過自由現金流還是通過以有吸引力的價格籌集資本。最終,如果公司不能履行其償還債務的法定義務,股東可能會一無所有地離開。然而,一種更常見(但仍令人痛苦)的情景是,它不得不以低價籌集新的股本,從而永久性地稀釋股東。話雖如此,最常見的情況是一家公司對債務管理得相當好--並對自己有利。當我們檢查債務水平時,我們首先同時考慮現金和債務水平。
查看我們對成都路橋工程有限公司的最新分析
成都路橋工程有限公司的債務是什麼?
下面的圖片,你可以點擊查看更多詳細信息,顯示成都路橋工程有限公司截至2022年6月底的債務為19.6億加元,較一年內的22.8億加元有所減少。然而,它確實有3.426億加元的現金來抵消這一點,導致淨債務約為16.2億加元。
![debt-equity-history-analysis](https://usnewsfile.futunn.com/pic/0-14412257-0-9f2e78693c94c4ae078e3d368f800e68.png/big)
深交所:002628債轉股歷史2022年9月6日
成都路橋工程有限公司的資產負債表有多強?
放大最新的資產負債表數據可以看到,成都路橋工程有限公司有26.4億加元的負債在12個月內到期,還有19.1億加元的負債在12個月內到期。另一方面,它有3.426億加元的現金和29.7億加元的應收賬款在一年內到期。因此,其負債比現金和(近期)應收賬款之和高出12.3億元。
這一赤字並不是那麼糟糕,因為成都路橋工程有限公司價值人民幣35.5億元,因此如果需要的話,可能會籌集到足夠的資本來支撐其資產負債表。但我們肯定希望密切關注其債務帶來太大風險的跡象。在分析債務水平時,資產負債表顯然是一個起點。但成都路橋工程有限責任公司的盈利將影響未來資產負債表的表現。因此,當考慮債務時,絕對值得關注收益趨勢。點擊此處查看互動快照。
過去12個月,成都路橋工程有限公司息税前利潤出現虧損,收入降至15億元人民幣,降幅為29%。坦率地説,這不是一個好兆頭。
告誡買入者
成都路橋工程有限公司不僅在過去12個月中收入下滑,而且息税前收益(EBIT)也出現了負增長。事實上,在息税前利潤水平上,它虧損了2700萬元人民幣。考慮到除了上面提到的債務,我們對公司應該使用如此多的債務沒有太大的信心。因此,我們認為它的資產負債表有點緊張,但並不是無法修復。如果它將過去12個月1400萬元的虧損扭虧為盈,我們會感覺更好。因此,簡而言之,這是一隻非常有風險的股票。當你分析債務時,資產負債表顯然是你關注的領域。然而,並非所有投資風險都存在於資產負債表中--遠非如此。我們已經確定了兩個警告信號與成都路橋工程有限公司(至少1個不應被忽視)合作,瞭解它們應該是您投資過程的一部分。
如果你有興趣投資於可以在沒有債務負擔的情況下增長利潤的企業,那麼看看這個免費資產負債表上有淨現金的成長型企業名單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。