Here's Why Dream Finders Homes (NYSE:DFH) Can Manage Its Debt Responsibly
Here's Why Dream Finders Homes (NYSE:DFH) Can Manage Its Debt Responsibly
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.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that Dream Finders Homes, Inc. (NYSE:DFH) does use debt in its business. But the real question is whether this debt is making the company risky.
巴菲特夥伴嘉利·芒格支持的外部基金經理人李璐說:“最大的投資風險不是價格波動性,而是您是否會蒙受永久性資本損失。” 當您檢視一家公司的風險時,請考慮其資產負債表,因為在企業破產時通常涉及債務。 我們可以看到,Dream Finders Homes(NYSE:DFH)的業務確實使用債務。 但實際問題是,這些債務是否使公司變得更具風險性。
Why Does Debt Bring Risk?
爲什麼債務會帶來風險?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. 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 think about a company's use of debt, we first look at cash and debt together.
債務對於企業提供協助,直至企業難以通過新資本或自由現金流支付債務時。 最終,如果公司無法履行償還債務的法定義務,股東可能一無所有。 但是,更常見(但仍然痛苦)的情況是,公司必須以低價籌集新的股票資本,從而永久稀釋股東的權益。 話雖如此,最常見的情況是公司合理管理其債務 - 並以自己的利益為主。 當我們考慮公司使用的負債時,我們首先查看現金和負債。
What Is Dream Finders Homes's Net Debt?
Dream Finders Homes 的淨負債是多少?
As you can see below, at the end of March 2024, Dream Finders Homes had US$1.00b of debt, up from US$916.0m a year ago. Click the image for more detail. However, it does have US$239.4m in cash offsetting this, leading to net debt of about US$765.1m.
正如下面所示,在2024年3月底,Dream Finders Homes的債務達到10億美元,較去年的9.16億美元有所增加。 點擊圖像獲取更多詳細信息。 然而,它確實有2.394億美元的現金抵消,導致淨負債約爲7.651億美元。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240702/0-955f23f9ce1e9db42b77e243054d4102-0-9fbb6b05389b3235801a69c94283e8fc.png/big)
How Healthy Is Dream Finders Homes' Balance Sheet?
Dream Finders Homes的資產負債表有多健康?
The latest balance sheet data shows that Dream Finders Homes had liabilities of US$258.3m due within a year, and liabilities of US$1.31b falling due after that. On the other hand, it had cash of US$239.4m and US$28.2m worth of receivables due within a year. So its liabilities total US$1.30b more than the combination of its cash and short-term receivables.
最新的資產負債表數據顯示,2024年3月底,Dream Finders Homes有2.583億美元的短期債務到期,之後到期的債務達到13.1億美元。 另一方面,它有2.394億美元的現金和2820萬美元的應收款項到期。 因此,其負債總額比其現金和短期應收款項的組合多13億美元。
While this might seem like a lot, it is not so bad since Dream Finders Homes has a market capitalization of US$2.42b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk.
雖然這看起來很多,但 Dream Finders Homes 的市值為24.2億美元,因此如果需要,它可以通過集資來加強資產負債表。 但是,我們肯定要密切觀察其債務帶來的風險。
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). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.
爲了比較一個公司的債務與其收益的關係,我們計算其淨債務除以利息、稅、折舊和攤銷前的收益和利息前的收益(其利息覆蓋率)。因此,我們考慮了債務的絕對數量以及支付的利率。
Dream Finders Homes's net debt to EBITDA ratio of about 1.7 suggests only moderate use of debt. And its commanding EBIT of 1k times its interest expense, implies the debt load is as light as a peacock feather. If Dream Finders Homes can keep growing EBIT at last year's rate of 18% over the last year, then it will find its debt load easier to manage. 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 Dream Finders Homes 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.
Dream Finders Homes 的淨負債佔稅息前利潤(EBITDA)比率約爲1.7,表明僅有適度的負債。 擁有卓越的稅息前利潤1k倍的支配地位意味着負債負擔像孔雀羽毛一樣輕盈。 如果 Dream Finders Homes 可以保持去年18%的EBIT增長率,那麼它會發現更容易管理其債務負擔。
Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. So we always check how much of that EBIT is translated into free cash flow. Over the last three years, Dream Finders Homes reported free cash flow worth 17% of its EBIT, which is really quite low. That limp level of cash conversion undermines its ability to manage and pay down debt.
在考察資產負債表時,一家公司需要自由現金流來償還債務; 會計利潤並不能解決問題。 因此,我們總是檢查其稅息前利潤的多少被轉化爲自由現金流。 Dream Finders Homes在過去三年中報告了價值爲EBIT 17%的自由現金流,這實際上相當低。 那種低劣的現金轉化水平削弱了其管理和償還債務的能力。
Our View
我們的觀點
When it comes to the balance sheet, the standout positive for Dream Finders Homes was the fact that it seems able to cover its interest expense with its EBIT confidently. However, our other observations weren't so heartening. For example, its conversion of EBIT to free cash flow makes us a little nervous about its debt. When we consider all the factors mentioned above, we do feel a bit cautious about Dream Finders Homes's use of debt. While we appreciate debt can enhance returns on equity, we'd suggest that shareholders keep close watch on its debt levels, lest they increase. 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. Be aware that Dream Finders Homes is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...
說到資產負債表,Dream Finders Homes最亮眼的正面因素是它似乎能夠自信地用EBIt支付利息。 但是,我們的其他觀察結果並不是那麼令人振奮。 例如,它將EBIt轉化爲自由現金流的能力讓我們對其債務感到有些緊張。 考慮到上述所有因素,我們對Dream Finders Homes的債務使用還是有些謹慎的。雖然我們知道借債可以提高股本回報率,但我們建議股東密切關注其債務水平,以防其增加。 毫無疑問,我們從資產負債表上可以了解大多數關於債務的信息。 但最終,每個公司都可能存在超出資產負債表範圍的風險。請注意,我們的投資分析中Dream Finders Homes顯示了2個警告信號,其中1個不能忽視...
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.
如果您有興趣投資能夠在不負債的情況下增長利潤的企業,請查看這份免費列表,其中列出了在資產負債表上擁有淨現金的成長型企業。
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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。
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