Here's Why Guangxi Liugong Machinery (SZSE:000528) Can Manage Its Debt Responsibly
Here's Why Guangxi Liugong Machinery (SZSE:000528) Can Manage Its Debt Responsibly
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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. Importantly, Guangxi Liugong Machinery Co., Ltd. (SZSE:000528) does carry debt. But should shareholders be worried about its use of debt?
沃伦·巴菲特曾经说过:“波动性与风险远非同义词。” 当我们考虑一家公司有多大风险时,我们总是喜欢看看它的债务使用情况,因为债务过重可能导致破产。 重要的是,柳工机械股份有限公司(SZSE:000528)确实存在债务。 但股东们应该担心公司的债务使用吗?
When Is Debt Dangerous?
债务何时有危险?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. When we examine debt levels, we first consider both cash and debt levels, together.
企业使用债务进行资本或自由现金流的问题,以便在出现付不起债务的情况下进一步帮助企业。最不理想的情况是企业无法偿付债权人而破产。然而,更经常出现的情况(尽管成本较高)是企业必须以大幅低于市价的价格发行股票,从而永久性的稀释股东以保持其资产负债表的稳定。债务取代股份稀释,是公司在需要以高回报投资于增长的资本时的极有效的工具。在我们研究债务水平时,我们首先考虑现金和债务水平两者共同的问题。
What Is Guangxi Liugong Machinery's Debt?
广西柳工机械的债务是什么?
The image below, which you can click on for greater detail, shows that Guangxi Liugong Machinery had debt of CN¥10.8b at the end of March 2024, a reduction from CN¥12.7b over a year. On the flip side, it has CN¥8.86b in cash leading to net debt of about CN¥1.94b.
下面的图片,您可以点击查看更详细的信息,显示柳工机械于2024年3月底的债务为108亿元人民币,比一年前的127亿元人民币有所减少。 另一方面,它有88.6亿元人民币的现金,导致净债务约为19.4亿元人民币。
![1724711798256](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240827/42901695-0-814bf3055582e9294714e271bed0bd0c.webp/bigjpg)
How Strong Is Guangxi Liugong Machinery's Balance Sheet?
柳工的资产负债表有多强?
Zooming in on the latest balance sheet data, we can see that Guangxi Liugong Machinery had liabilities of CN¥22.2b due within 12 months and liabilities of CN¥6.13b due beyond that. Offsetting these obligations, it had cash of CN¥8.86b as well as receivables valued at CN¥12.2b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥7.28b.
放大最新财务报告的数据,我们可以看到柳工在12个月内有222亿元的短期负债和613亿元的长期负债。抵消这些负债,它有886亿元的现金和122亿元的应收款项。因此,它的负债超过了其现金和(短期)应收款项的总和,达到了728亿元。
While this might seem like a lot, it is not so bad since Guangxi Liugong Machinery has a market capitalization of CN¥18.7b, and so it could probably strengthen its balance sheet by raising capital if it needed to. However, it is still worthwhile taking a close look at its ability to pay off debt.
虽然这听起来很多,但柳工的总市值为187亿元,所以如果需要,可以通过增加资本来强化其资产负债表。然而,仍然值得密切关注其偿债能力。
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). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
我们通过查看净债务与利息、税、折旧和摊销前收益(EBITDA)之比以及计算其利息支出由收益前利息和税(EBIT)覆盖的程度来度量一家公司的债务负载相对于其收益能力的程度。此方法的优点在于我们同时考虑了债务的绝对量(以净债务为EBITDA)以及与该债务相关的实际利息支出(以其利息覆盖倍数计算)。
Guangxi Liugong Machinery's net debt is only 0.87 times its EBITDA. And its EBIT covers its interest expense a whopping 89.0 times over. So you could argue it is no more threatened by its debt than an elephant is by a mouse. On top of that, Guangxi Liugong Machinery grew its EBIT by 64% over the last twelve months, and that growth will make it easier to handle its debt. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Guangxi Liugong Machinery'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.
柳工的净债务仅为其息税折旧及摊销前利润(EBITDA)的0.87倍。其EBIT覆盖其利息支出高达89.0倍。因此,可以说它受到债务威胁的程度不亚于大象受到老鼠的威胁。此外,柳工过去12个月的EBIT增长了64%,这种增长将使其更容易处理债务。毫无疑问,我们从资产负债表中了解债务的情况最多。但决定柳工未来是否能维持健康资产负债表的能力更多取决于未来的收入。因此,如果您关注未来,可以查看此免费报告,其中列出了分析师的利润预测。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So we always check how much of that EBIT is translated into free cash flow. In the last three years, Guangxi Liugong Machinery created free cash flow amounting to 19% of its EBIT, an uninspiring performance. That limp level of cash conversion undermines its ability to manage and pay down debt.
最后,虽然税务机构可能喜欢会计利润,但贷方只接受冷硬现金。因此,我们始终要检查EBIT中有多少被转化为自由现金流。在过去三年中,柳工创造了相当于其EBIT的19%的自由现金流,这是一个不太令人激动的表现。这种低水平的现金转化能力削弱了其管理和偿还债务的能力。
Our View
我们的观点
The good news is that Guangxi Liugong Machinery's demonstrated ability to cover its interest expense with its EBIT delights us like a fluffy puppy does a toddler. But, on a more sombre note, we are a little concerned by its conversion of EBIT to free cash flow. Looking at all the aforementioned factors together, it strikes us that Guangxi Liugong Machinery can handle its debt fairly comfortably. Of course, while this leverage can enhance returns on equity, it does bring more risk, so it's worth keeping an eye on this one. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example - Guangxi Liugong Machinery has 2 warning signs we think you should be aware of.
好消息是,柳工展示了以其EBIt支付利息的能力,这让我们像对待蓬松小狗一样激动。但是,更严肃的是,我们对其EBIt转化为自由现金流的情况有些担忧。综合考虑所有上述因素,我们认为柳工可以相当轻松地处理其债务。当然,虽然杠杆可以提高股东回报,但它也带来了更多的风险,所以注意这一点是值得的。在分析债务时,资产负债表显然是应该重点关注的区域。但是最终,每家公司都可能存在在资产负债表之外的风险。例如,柳工有2个警示信号,我们认为你应该意识到这一点。
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.
如果您有兴趣投资能够在不负债的情况下增长利润的企业,请查看这份免费列表,其中列出了在资产负债表上拥有净现金的成长型企业。
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.
对本文有任何反馈?对内容有任何疑虑?请直接与我们联系。或者,发送电子邮件至editorial-team@simplywallst.com。
这篇文章是Simply Wall St的一般性文章。我们根据历史数据和分析师预测提供评论,只使用公正的方法论,我们的文章并不意味着提供任何金融建议。文章不构成买卖任何股票的建议,也不考虑您的目标或您的财务状况。我们的目标是带给您基本数据驱动的长期关注分析。请注意,我们的分析可能不考虑最新的价格敏感公司公告或定性材料。Simply Wall St没有任何股票头寸。