Is Aris Water Solutions (NYSE:ARIS) Using Too Much Debt?
Is Aris Water Solutions (NYSE:ARIS) Using Too Much Debt?
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.' 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 Aris Water Solutions, Inc. (NYSE:ARIS) does use debt in its business. But is this debt a concern to shareholders?
由Berkshire Hathaway的Charlie Munger支持的外部基金管理員Li Lu毫不掩飾地表示,「最大的投資風險不是價格波動,而是您是否會遭受永久性的資本損失。」因此,聰明人知道債務(通常涉及破產)是評估公司風險時非常重要的因素。我們可以看到Aris Water Solutions,Inc.(NYSE:ARIS)在業務中確實使用了債務。但是這筆債務是否會引起股東的擔憂呢?
Why Does Debt Bring Risk?
爲什麼債務會帶來風險?
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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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. 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.
當企業無法輕鬆用自由現金流或以有吸引力的價格籌集資金來履行那些義務時,債務和其他負債會對企業產生風險。資本主義的一部分是「創造性破壞」的過程,在這個過程中,失敗的企業無情地被銀行家清算。雖然這不太常見,但我們經常看到負債累累的公司因爲借貸者強迫它們以困境價格籌集資本而永久性稀釋股東。然而,通過取代稀釋,債務可以成爲需要資金以高回報率投資增長的企業的極其有用的工具。在考慮企業使用多少債務時,第一件要做的事情是查看它的現金和債務。
What Is Aris Water Solutions's Debt?
Aris Water Solutions的債務是多少?
The image below, which you can click on for greater detail, shows that at June 2024 Aris Water Solutions had debt of US$446.6m, up from US$423.9m in one year. However, because it has a cash reserve of US$11.5m, its net debt is less, at about US$435.1m.
下面的圖片可以點擊以獲得更詳細的信息,顯示Aris Water Solutions在2024年6月有446.6百萬美元的債務,較一年前的423.9百萬美元增加。但是,由於它有1,150萬美元的現金儲備,因此其淨債務爲約435.1萬美元。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240820/0-e5c935fcab5928dcf3fb610acef57d01-0-fb6954a4963c1dc2acd8ac0084cd1c4e.png/big)
How Strong Is Aris Water Solutions' Balance Sheet?
Aris Water Solutions的資產負債表有多強?
The latest balance sheet data shows that Aris Water Solutions had liabilities of US$94.9m due within a year, and liabilities of US$580.0m falling due after that. Offsetting these obligations, it had cash of US$11.5m as well as receivables valued at US$106.9m due within 12 months. So it has liabilities totalling US$556.5m more than its cash and near-term receivables, combined.
最新的資產負債表數據顯示,Aris Water Solutions有9490萬美元的負債到期,這些負債將在一年內到期,580.0百萬美元的負債將在此之後到期。抵消這些義務,它有現金1,150萬美元以及在12個月內到期的應收款項,價值1,0690萬美元。因此,它的負債總額超過了現金和短期應收款項,合計爲5,5650萬美元。
This deficit isn't so bad because Aris Water Solutions is worth US$943.1m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution.
這種赤字並不那麼糟糕,因爲Aris Water Solutions價值943.1百萬美元,因此如果需要,它可能可以籌集足夠的資本來支撐其資產負債表。但很明顯,我們一定要密切檢查它能否在未稀釋股東權益的情況下管理其債務。
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。
Aris Water Solutions's net debt is sitting at a very reasonable 2.5 times its EBITDA, while its EBIT covered its interest expense just 2.9 times last year. While these numbers do not alarm us, it's worth noting that the cost of the company's debt is having a real impact. It is well worth noting that Aris Water Solutions's EBIT shot up like bamboo after rain, gaining 41% in the last twelve months. That'll make it easier to manage its debt. 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 Aris Water Solutions can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Aris Water Solutions的淨債務是其EBITDA的2.5倍,而它的EBIt去年僅覆蓋了其利息支出的2.9倍。儘管這些數字並沒有讓我們擔憂,但值得注意的是,公司的債務成本確實產生了真正的影響。需要注意的是,Aris Water Solutions的EBIt在過去12個月中飆升,增長了41%。這將使其更容易處理其債務。毫無疑問,我們從資產負債表中學到的關於債務的大部分內容。但最終,企業的未來盈利能力將決定Aris Water Solutions是否能夠隨着時間的推移加強其資產負債表。因此,如果您專注於未來,可以查看這份免費報告,其中顯示了分析師的利潤預測。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. Over the last three years, Aris Water Solutions saw substantial negative free cash flow, in total. While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.
最後,儘管稅務局可能喜歡會計利潤,但貸款人只接受冰冷的現金。因此,我們明顯需要查看EBIt是否導致相應的自由現金流。在過去的三年中,Aris Water Solutions的自由現金流總量相當大且爲負。儘管投資者無疑希望在適當的時候扭轉這種情況,但這顯然意味着它的債務使用更加冒險。
Our View
我們的觀點
Aris Water Solutions's conversion of EBIT to free cash flow and interest cover definitely weigh on it, in our esteem. But its EBIT growth rate tells a very different story, and suggests some resilience. When we consider all the factors discussed, it seems to us that Aris Water Solutions is taking some risks with its use of debt. So while that leverage does boost returns on equity, we wouldn't really want to see it increase from here. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. Case in point: We've spotted 3 warning signs for Aris Water Solutions you should be aware of, and 1 of them doesn't sit too well with us.
Aris Water Solutions的EBIt轉換爲自由現金流和利息覆蓋率確實會影響到它的評價。但是,它的EBIt增長率講述了完全不同的故事,並表明了一些韌性。當我們考慮到所有討論的因素時,我們認爲Aris Water Solutions在使用債務方面存在一些風險。因此,雖然這種槓桿作用可以提高股本回報率,但我們不想看到它從這裏增加。在分析債務水平時,資產負債表是顯而易見的起點。然而,並非所有的投資風險都源自資產負債表——遠非如此。就拿以下事例來說:我們發現Aris Water Solutions存在3個預警信號,您應該注意其中一個有些不太好。
Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.
當然,如果您是那種喜歡購買沒有債務負擔的股票的投資者,那麼不要猶豫,立即發現我們獨家的淨現金增長股票列表。
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