Here's Why Advanced Drainage Systems (NYSE:WMS) Can Manage Its Debt Responsibly
Here's Why Advanced Drainage Systems (NYSE:WMS) Can Manage Its Debt Responsibly
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies Advanced Drainage Systems, Inc. (NYSE:WMS) makes use of debt. But the more important question is: how much risk is that debt creating?
禾倫·巴菲特曾經說過:“波動性與風險遠非同義詞。”因此,當考慮股票的風險時,需要考慮債務,因爲過多的債務可能會使一家公司陷入困境。與許多其他公司一樣,Advanced Drainage Systems, Inc. (紐交所:WMS) 也利用了債務。但更重要的問題是:這筆債務正在產生多少風險?
Why Does Debt Bring Risk?
爲什麼債務會帶來風險?
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. 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. The first step when considering a company's debt levels is to consider its cash and debt together.
債務是幫助企業成長的工具,但如果企業無法償還債權人,那麼企業就處於債權人的掌控之下。最壞的情況是,企業如果無法償還債務,就會破產。雖然這種情況不太常見,但我們通常會看到有負債的企業因爲債權人迫使它們以低於市場價格的價格發行股票而導致股東持股比例被嚴重稀釋。話雖如此,最常見的情況是企業合理管理債務,並將其化爲自身的優勢。考慮一家公司的債務水平時,第一步是將其現金和債務放在一起考慮。
How Much Debt Does Advanced Drainage Systems Carry?
Advanced Drainage Systems承載了多少債務?
The chart below, which you can click on for greater detail, shows that Advanced Drainage Systems had US$1.27b in debt in March 2024; about the same as the year before. However, because it has a cash reserve of US$490.2m, its net debt is less, at about US$781.2m.
下面的圖表顯示,Advanced Drainage Systems在2024年3月有12.7億美元的債務,與去年大致相同。然而,由於它擁有4.902億美元的現金儲備,因此其淨債務較少,約爲7.812億美元。
![debt-equity-history-analysis](https://newsfile.futunn.com/public/NN-PersistNewsContentImage/7781/20240620/0-b23f7a4618cee880fd438c222bfd1cf8-0-150a4bd383930287f0094dbc8658d840.png/big)
How Healthy Is Advanced Drainage Systems' Balance Sheet?
Advanced Drainage Systems的資產負債表狀況如何?
Zooming in on the latest balance sheet data, we can see that Advanced Drainage Systems had liabilities of US$439.6m due within 12 months and liabilities of US$1.66b due beyond that. Offsetting this, it had US$490.2m in cash and US$323.6m in receivables that were due within 12 months. So it has liabilities totalling US$1.28b more than its cash and near-term receivables, combined.
進一步審視最新的資產負債表數據,我們可以看到Advanced Drainage Systems有44億美元的負債,其中12個月內到期的負債爲4.396億美元,而超過12個月到期的負債爲16.6億美元。抵消這一點的是,它擁有4.902億美元的現金和3.236億美元的應收款項,這些款項在12個月內到期。因此,其負債總額超過其現金和臨近到期的應收款項約12.8億美元。
Given Advanced Drainage Systems has a humongous market capitalization of US$13.7b, 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.
考慮到Advanced Drainage Systems具有巨大的137億美元的市值,很難相信這些負債會構成多大的威脅。話雖如此,很明顯我們應該繼續監督其資產負債表,以免出現糟糕的情況。
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). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.
我們通過查看淨債務除以利息、稅、折舊和攤銷前的收益(EBITDA)並計算其利息費用(利息覆蓋)來相對衡量公司的負債水平。這樣,我們考慮債務的絕對規模以及支付的利息費用。
Advanced Drainage Systems's net debt is only 0.91 times its EBITDA. And its EBIT covers its interest expense a whopping 10.8 times over. So you could argue it is no more threatened by its debt than an elephant is by a mouse. Advanced Drainage Systems's EBIT was pretty flat over the last year, but that shouldn't be an issue given the it doesn't have a lot of debt. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Advanced Drainage Systems's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Advanced Drainage Systems的淨債務僅爲其息稅前息折舊攤銷前利潤(EBITDA)的0.91倍。其息稅前盈利(EBIT)覆蓋其利息支出高達10.8倍。因此你可以認爲它受到的債務威脅不比大象受到老鼠威脅大。儘管去年Advanced Drainage Systems的EBIT幾乎沒有變化,但由於它沒太多債務,這一點並不是問題。分析債務水平時,資產負債表是顯然的起點。但是,未來的收益,而不是任何東西,將決定Advanced Drainage Systems維持健康資產負債表的能力。因此,如果你關注未來,你可以查看這份報告,其中包括分析家的盈利預測。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. Over the most recent three years, Advanced Drainage Systems recorded free cash flow worth 63% of its EBIT, which is around normal, given free cash flow excludes interest and tax. This cold hard cash means it can reduce its debt when it wants to.
但我們最終的考慮也很重要,因爲公司無法用紙質利潤支付債務;它需要冷硬的現金。因此,我們明確需要研究一下EBIT是否導致相應的自由現金流。在最近的三年中,Advanced Drainage Systems的自由現金流價值相當於其EBIT的63%,這是正常的,因爲自由現金流不包括利息和稅款。這些冷硬的現金意味着它可以隨時減輕債務。
Our View
我們的觀點
The good news is that Advanced Drainage Systems's demonstrated ability to cover its interest expense with its EBIT delights us like a fluffy puppy does a toddler. And the good news does not stop there, as its net debt to EBITDA also supports that impression! When we consider the range of factors above, it looks like Advanced Drainage Systems is pretty sensible with its use of debt. While that brings some risk, it can also enhance returns for shareholders. 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. For example - Advanced Drainage Systems has 2 warning signs we think you should be aware of.
好消息是,Advanced Drainage Systems用其EBIT覆蓋其利息支出的能力,讓我們感到像毛絨絨的小狗一樣高興。並且好消息並不止於此,因爲其淨債務與息稅前息折舊攤銷前利潤比率(EBITDA)也支持這一印象!當我們考慮到以上各種因素時,看起來Advanced Drainage Systems在使用債務方面相當明智。雖然這會帶來一些風險,但也可以增加股東的回報。當你分析債務時,資產負債表顯然是需要關注的領域。但是,並非所有的投資風險都來自資產負債表——離譜得遠了。例如Advanced Drainage Systems有2個警告信號,我們認爲你應該注意。
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
總的來說,專注於沒有淨債務的公司往往更好。您可以訪問我們的特別列表,其中包含這些公司(所有這些公司都有盈利增長的記錄)。這是免費的。
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.
對本文有反饋?關於內容有所顧慮?直接和我們聯繫。或者,發送電子郵件至editorial-team (at) simplywallst.com。
這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
對本文有反饋?關於內容有所顧慮?直接和我們聯繫。或者發送電子郵件至editorial-team@simplywallst.com。