Here's Why Solventum (NYSE:SOLV) Can Manage Its Debt Responsibly
Here's Why Solventum (NYSE:SOLV) Can Manage Its Debt Responsibly
Legendary fund manager Li Lu (who Charlie Munger backed) once said, '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. We note that Solventum Corporation (NYSE:SOLV) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
李錄(查理·芒格支持的傳奇基金經理)曾經說過:“最大的投資風險不在於價格波動,而在於是否會遭受永久性的資金損失。” 當我們考慮一家公司的風險性時,我們總是喜歡查看它的債務使用情況,因爲債務過重可能會導致破產。 我們注意到,Solventum Corporation (紐約證券交易所:SOLV)的資產負債表上確實有債務。 但更重要的問題是:這些債務產生了多大的風險?
When Is Debt A Problem?
什麼時候負債才是一個問題?
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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.
債務是幫助企業增長的工具,但如果企業無力償還債權人,那麼企業就處於他們的掌控之下。資本主義的重要組成部分之一是“創造性破壞”的過程,失敗的企業被銀行家無情地清算。然而,更頻繁的(但仍然代價高昂的)情況是,一家公司必須以低廉的價格發行股票,永久性地稀釋股東權益,以此來支撐其資產負債表。當然,債務可以是企業的重要工具,特別是對於資本密集型企業來說。在考慮公司的債務水平時,第一步是將其現金和債務合併考慮。
What Is Solventum's Net Debt?
Solventum的淨債務是多少?
You can click the graphic below for the historical numbers, but it shows that as of March 2024 Solventum had US$8.30b of debt, an increase on US$95.0m, over one year. However, because it has a cash reserve of US$996.0m, its net debt is less, at about US$7.31b.
您可以點擊下面的圖表查看歷史數據,但它顯示截至2024年3月,Solventum有83億美元的債務,比去年增加9500萬美元。 然而,由於它有99600萬美元的現金儲備,其淨債務較少,約爲731億美元。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240723/0-0243cbf79e9bd3a3b08b8c608ddcbcde-0-26bd336aa666da8aaa8a6e0d49e90335.png/big)
A Look At Solventum's Liabilities
看一下Solventum的負債
The latest balance sheet data shows that Solventum had liabilities of US$1.85b due within a year, and liabilities of US$9.01b falling due after that. Offsetting these obligations, it had cash of US$996.0m as well as receivables valued at US$1.22b due within 12 months. So it has liabilities totalling US$8.64b more than its cash and near-term receivables, combined.
最新的資產負債表數據顯示,Solventum有18.5億美元的應付短期債務,以及90.1億美元的中長期債務。 抵消這些義務的是,它有99600萬美元的現金和應收賬款,價值12.2億美元,其應於12個月內到期。 因此,它的負債總額超過現金和短期應收賬款約86.4億美元。
This is a mountain of leverage relative to its market capitalization of US$9.43b. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution.
相對於其市值9430萬美元而言,這是一座負債累累的大山。如果其放貸人要求其加固資產負債表,則股東可能面臨嚴重的稀釋。
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.
通過查看公司的淨債務與利息、稅、折舊、攤銷前利潤(EBITDA)之比以及它的利息費用(利息覆蓋率)可以衡量一個公司的債務負擔與收益能力。因此,我們考慮將債務與有無計算折舊和攤銷費用的收益相對比。
Solventum's net debt is 3.2 times its EBITDA, which is a significant but still reasonable amount of leverage. But its EBIT was about 43.7 times its interest expense, implying the company isn't really paying a high cost to maintain that level of debt. Even were the low cost to prove unsustainable, that is a good sign. Solventum grew its EBIT by 5.7% in the last year. That's far from incredible but it is a good thing, when it comes to paying off 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 Solventum 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.
Solventum的淨債務是其EBITDA的3.2倍,這是一筆相當大但仍然合理的槓桿。但其EBIT是其利息費用的約43.7倍,這意味着公司並沒有爲維持這種債務水平而支付高昂的成本。即使低成本證明不可持續,這也是一個好兆頭。 Solventum去年的EBIT增長了5.7%。這遠非令人難以置信,但對於償還債務是個好事。在分析債務水平時,資產負債表是顯然的起點。但最終業務未來的盈利能力將決定Solventum能否隨着時間推移加強其資產負債表。因此,如果您想了解專業人士的看法,您可能會找到這份免費的分析師盈利預測報告很有趣。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. So we always check how much of that EBIT is translated into free cash flow. During the last three years, Solventum generated free cash flow amounting to a very robust 95% of its EBIT, more than we'd expect. That positions it well to pay down debt if desirable to do so.
但我們的最終考慮也很重要,因爲一家公司無法用紙質利潤支付債務,它需要硬通貨。因此,我們總是檢查其中有多少是將EBIT轉化爲自由現金流。在過去的三年中,Solventum產生了非常可觀的自由現金流,達到其EBIT的95%,超出我們的預期。這使它能夠在需要時償還債務。
Our View
我們的觀點
Solventum's interest cover was a real positive on this analysis, as was its conversion of EBIT to free cash flow. On the other hand, its level of total liabilities makes us a little less comfortable about its debt. We would also note that Medical Equipment industry companies like Solventum commonly do use debt without problems. When we consider all the elements mentioned above, it seems to us that Solventum is managing its debt quite well. But a word of caution: we think debt levels are high enough to justify ongoing monitoring. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. Be aware that Solventum is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
Solventum的利息覆蓋率在本分析中是一個真正的優點,以及其將EBIT轉化爲自由現金流。另一方面,其總負債水平使我們對其債務感到有些不舒服。我們也會注意到,像Solventum這樣的醫療器械行業公司通常會毫無問題地使用債務。當我們考慮上述所有要素時,我們認爲Solventum在管理其債務方面做得相當不錯。但需要注意的是:我們認爲債務水平高到足以證明繼續監控。毫無疑問,我們從資產負債表中學到了大部分的債務情況。然而,並非所有的投資風險都在資產負債表上——遠非如此。請注意,Solventum在我們的投資分析中顯示出了2個警示信號,其中1個有些令人不愉快......
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
如果在所有這些之後,您更感興趣的是具有堅實資產負債表的快速增長公司,那麼不要拖延,查看我們的淨現金增長股票列表。
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.
對本文有任何反饋?對內容有任何疑慮?請直接與我們聯繫。或者,發送電子郵件至editorial-team@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
對本文有任何反饋?對內容有任何疑慮?請直接與我們聯繫。或者,發送電子郵件至editorial-team@simplywallst.com。