Here's Why Sherwin-Williams (NYSE:SHW) Can Manage Its Debt Responsibly
Here's Why Sherwin-Williams (NYSE:SHW) 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.' 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. As with many other companies The Sherwin-Williams Company (NYSE:SHW) makes use of debt. But the real question is whether this debt is making the company risky.
傳說中的基金經理李錄(得到了查理·芒格的支持)曾經說過:「最大的投資風險不是價格的波動性,而是你是否會遭受資本的永久損失。」當你考慮一個公司的資產負債表時,考慮到債務的存在很自然,因爲當一個企業破產時往往涉及到債務。正如許多其他公司一樣,Sherwin-Williams公司(紐交所代碼:SHW)借入了債務。真正的問題是這些債務是否使公司承擔風險.
What Risk Does Debt Bring?
債務帶來了什麼風險?
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 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. 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.
債務可以幫助企業,直到企業發生困難並無法以新資本或自由現金流償還債務時爲止。如果公司無法履行償還債務的法律義務,股東可能什至一無所有。然而,一種更經常(但仍然代價高昂)的情況是,公司不得不以低於市場價格發行股票,永久稀釋股東,以加強其資產負債表。然而,通過取代稀釋,債務可以成爲需要資本以高回報率投資增長的企業的一種極好的工具。在考慮企業使用多少債務時,首先要做的是查看其現金和債務的總體情況。
What Is Sherwin-Williams's Net Debt?
Sherwin-Williams的淨債務是多少?
The chart below, which you can click on for greater detail, shows that Sherwin-Williams had US$10.3b in debt in June 2024; about the same as the year before. And it doesn't have much cash, so its net debt is about the same.
下圖是詳細信息,請點擊查看:Sherwin-Williams在2024年6月有10.3億美元的債務,與去年大致相同。且現金不多,所以其淨債務也差不多。
![big](https://newsfile.futunn.com/public/NN-PersistNewsContentImage/7781/20240909/0-9e210f2b10814c322429a14c09795009-0-01bca8dcef907a286a3165c11d86b084.png/big)
How Strong Is Sherwin-Williams' Balance Sheet?
宣偉公司的資產負債表有多強?
We can see from the most recent balance sheet that Sherwin-Williams had liabilities of US$7.47b falling due within a year, and liabilities of US$12.5b due beyond that. Offsetting these obligations, it had cash of US$200.0m as well as receivables valued at US$3.11b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$16.7b.
我們可以從最近的資產負債表看到,宣偉公司短期負債爲74.7億美元,長期負債爲125億美元。 抵消這些債務,它持有2億美元的現金以及價值31.1億美元的應收賬款,其中12個月內到期。 因此,其負債超過了其現金和(短期)應收賬款的總和167億美元。
Of course, Sherwin-Williams has a titanic market capitalization of US$91.0b, so these liabilities are probably manageable. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward.
當然,宣偉公司的市值高達910億美元,因此這些負債可能是可以管理的。 但是有足夠的負債,我們肯定會建議股東繼續關注資產負債表的情況。
We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.
Service Corporation International的債務是其EBITDA的3.5倍,而其EBIT可覆蓋其利息開支的3.7倍。綜合考慮,雖然我們不希望看到債務水平上升,但我們認爲它可以應對當前的槓桿。好消息是,Service Corporation International在過去12個月中將其EBIT提高了2.9%,從而逐漸降低了其相對於收益的債務水平。毫無疑問,我們從資產負債表中獲得了有關債務的大部分內容。但是,相對於資產負債表,更重要的是未來收益,這將決定Service Corporation International維持健康資產負債表的能力。如果您關注未來,您可以查看此免費報告,其中有分析師的利潤預測。
Sherwin-Williams's net debt of 2.3 times EBITDA suggests graceful use of debt. And the alluring interest cover (EBIT of 9.7 times interest expense) certainly does not do anything to dispel this impression. One way Sherwin-Williams could vanquish its debt would be if it stops borrowing more but continues to grow EBIT at around 10%, as it did over the last year. 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 Sherwin-Williams 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.
宣偉公司的淨債務爲EBITDA的2.3倍,表明其債務的使用合理。 令人嚮往的利息盈利覆蓋率(EBIT爲利息費用的9.7倍)確實並未消除這種印象。 宣偉公司可以戰勝債務的一種方式是停止借更多款項,而繼續讓EBIT以約10%的速度增長,就像去年一樣。 從資產負債表中,我們確實能學到最多關於債務。 但最終,業務的未來盈利能力將決定宣偉公司是否能夠隨時間加強其資產負債表。 因此,如果您想了解專業人士的看法,您可能會發現分析師盈利預測的免費報告很有趣。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. So it's worth checking how much of that EBIT is backed by free cash flow. Over the most recent three years, Sherwin-Williams recorded free cash flow worth 55% 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.
最後,一家公司只能用冷硬現金而不是會計利潤償還債務。 因此,值得查看EBIT中有多少是由自由現金流支持的。 在最近的三年中,宣偉公司錄得的自由現金流價值爲其EBIT的55%,這是相當正常的,因爲自由現金流不包括利息和稅金。 這筆冷硬現金意味着宣偉公司可以在需要時減少其債務。
Our View
我們的觀點
Sherwin-Williams's interest cover suggests it can handle its debt as easily as Cristiano Ronaldo could score a goal against an under 14's goalkeeper. And we also thought its EBIT growth rate was a positive. All these things considered, it appears that Sherwin-Williams can comfortably handle its current debt levels. On the plus side, this leverage can boost shareholder returns, but the potential downside is more risk of loss, so it's worth monitoring the balance sheet. 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. These risks can be hard to spot. Every company has them, and we've spotted 1 warning sign for Sherwin-Williams you should know about.
宣偉公司的利息覆蓋表明它可以像克里斯蒂亞諾·羅納爾多在14歲以下守門員面前進球一樣輕鬆地處理其債務。我們還認爲它的EBIt增長率是一個積極的因素。考慮到這些因素,宣偉公司似乎可以輕鬆地處理其當前的債務水平。從積極的一面來看,這種槓桿可以提高股東的回報,但潛在的下降風險更大,因此值得監控資產負債表。毫無疑問,我們從資產負債表中了解到的債務最多。然而,並不是所有的投資風險都存在於資產負債表內——遠非如此。這些風險很難發現。每個公司都有這些風險,我們已經發現了宣偉公司的1個警告信號,您應該知道。
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。
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