Company debt – Sharewared http://sharewared.com/ Tue, 11 Jan 2022 08:15:35 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://sharewared.com/wp-content/uploads/2021/06/icon-2021-06-29T134115.656-138x136.png Company debt – Sharewared http://sharewared.com/ 32 32 Does Viking Supply Ships (STO: VSSAB B) use debt wisely? https://sharewared.com/does-viking-supply-ships-sto-vssab-b-use-debt-wisely/ Tue, 11 Jan 2022 08:15:35 +0000 https://sharewared.com/does-viking-supply-ships-sto-vssab-b-use-debt-wisely/ Warren Buffett said: “Volatility is far from synonymous with risk”. It is only natural to consider a company’s balance sheet when considering how risky it is, as debt is often involved when a business collapses. Above all, Viking Supply Ships AB (released) (STO: VSSAB B) is in debt. But does this debt worry shareholders? When […]]]>

Warren Buffett said: “Volatility is far from synonymous with risk”. It is only natural to consider a company’s balance sheet when considering how risky it is, as debt is often involved when a business collapses. Above all, Viking Supply Ships AB (released) (STO: VSSAB B) is in debt. But does this debt worry shareholders?

When is Debt a Problem?

Debt is a tool to help businesses grow, but if a business is unable to repay its lenders, then it exists at their mercy. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. However, a more common (but still costly) event is when a company has to issue stock at bargain prices, constantly diluting shareholders, just to strengthen its balance sheet. Of course, debt can be an important tool in businesses, especially capital intensive businesses. The first thing to do when considering how much debt a business uses is to look at its cash flow and debt together.

See our latest review for Viking Supply Ships

What is the net debt of Viking Supply Ships?

You can click on the graph below for historical figures, but it shows that as of September 2021 Viking Supply Ships had a debt of 18.0million kr, an increase from none, year over year. However, his balance sheet shows that he has 34.0 million kr in cash, so he actually has 16.0 million kr in net cash.

OM: VSSAB B History of debt to equity January 11, 2022

How healthy is the balance sheet of Viking supply ships?

Zooming in on the latest balance sheet data, we can see that Viking Supply Ships had a liability of 88.0 million kr due within 12 months and a liability of 5.00 million kr due beyond. On the other hand, he had cash of 34.0 million kr and 25.2 million kr in receivables due within one year. Its liabilities therefore total 33.8 million kr more than the combination of its cash and short-term receivables.

Considering that Viking Supply Ships has a market cap of SEK 530.6 million, it’s hard to believe that these liabilities pose a big threat. Having said that, it is clear that we must continue to monitor his record lest it get worse. While it has some liabilities to note, Viking Supply Ships also has more cash than debt, so we’re pretty confident it can handle its debt safely. The balance sheet is clearly the area to focus on when analyzing debt. But it is the profits of Viking Supply Ships that will influence the way the balance sheet is maintained in the future. So if you want to know more about its profits, it may be worth checking out this long term profit trend chart.

Over the past year, Viking Supply Ships has incurred a loss before interest and taxes and has actually reduced its revenue by 27%, to 282 million crowns. To be frank, that doesn’t bode well.

So how risky are Viking Supply Ships?

By their very nature, businesses that lose money are riskier than those with a long history of profitability. And over the past year, Viking Supply Ships has recorded a loss of earnings before interest and taxes (EBIT), frankly. And in the same period, it recorded a negative free cash outflow of NKr 118 million and a book loss of NKr 136 million. With only 16.0 million crowns on the balance sheet, it looks like it will soon have to raise capital again. Overall, we would say the stock is a bit risky, and we’re generally very cautious until we see positive free cash flow. There is no doubt that we learn the most about debt from the balance sheet. However, not all investment risks lie on the balance sheet – far from it. These risks can be difficult to spot. Every business has them, and we’ve spotted 2 warning signs for Viking supply ships you should know.

At the end of the day, it’s often best to focus on businesses with no net debt. You can access our special list of these companies (all with a history of profit growth). It’s free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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Air Products and Chemicals (NYSE: APD) seems to be using debt quite wisely https://sharewared.com/air-products-and-chemicals-nyse-apd-seems-to-be-using-debt-quite-wisely/ Sun, 09 Jan 2022 12:10:27 +0000 https://sharewared.com/air-products-and-chemicals-nyse-apd-seems-to-be-using-debt-quite-wisely/ Warren Buffett said: “Volatility is far from synonymous with risk”. So it seems like smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess the level of risk of a business. Above all, Air Products and Chemicals, Inc. (NYSE: APD) is in debt. But […]]]>

Warren Buffett said: “Volatility is far from synonymous with risk”. So it seems like smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess the level of risk of a business. Above all, Air Products and Chemicals, Inc. (NYSE: APD) is in debt. But does this debt worry shareholders?

Why Does Debt Bring Risk?

Generally speaking, debt only becomes a real problem when a company cannot repay it easily, either by raising capital or with its own cash flow. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are ruthlessly liquidated by their bankers. However, a more common (but still painful) scenario is that he has to raise new equity at low cost, thereby constantly diluting shareholders. Of course, many companies use debt to finance their growth without negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash flow and debt together.

Check out our latest review for Air Products and Chemicals

How much debt do Air Products and Chemicals carry?

The graph below, which you can click for more details, shows that Air Products and Chemicals had $ 7.66 billion in debt as of September 2021; about the same as the year before. However, it has $ 5.82 billion in cash offsetting that, leading to net debt of around $ 1.85 billion.

NYSE: Historical Debt to Equity APD January 9, 2022

How strong is Air Products and Chemicals’ balance sheet?

The latest balance sheet data shows Air Products and Chemicals had $ 2.80 billion in debt due within one year, and $ 9.97 billion in debt due thereafter. In return, he had $ 5.82 billion in cash and $ 1.66 billion in receivables due within 12 months. As a result, its liabilities exceed the sum of its cash and (short-term) receivables by $ 5.30 billion.

Considering that Air Products and Chemicals has a whopping market cap of US $ 65.9 billion, it’s hard to believe that these liabilities pose a big threat. Having said that, it is clear that we must continue to monitor his record lest it get worse.

We measure a company’s indebtedness relative to its earning power by looking at its net debt divided by its earnings before interest, taxes, depreciation, and amortization (EBITDA) and calculating the ease with which its earnings before interest and taxes (EBIT ) covers its interests. costs (interest coverage). In this way, we consider both the absolute amount of debt, as well as the interest rates paid on it.

Air Products and Chemicals has a low net debt to EBITDA ratio of just 0.50. And its EBIT easily covers its interest costs, being 16.6 times higher. We could therefore say that he is no more threatened by his debt than an elephant is by a mouse. Fortunately, Air Products and Chemicals has increased its EBIT by 4.8% over the past year, which makes this debt load even more manageable. The balance sheet is clearly the area to focus on when analyzing debt. But it is future profits, more than anything, that will determine Air Products and Chemicals’ ability to maintain a healthy balance sheet in the future. So if you are focused on the future you can check this out free report showing analysts’ earnings forecasts.

But our last consideration is also important, because a business cannot pay its debts with paper profits; he needs hard cash. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years Air Products and Chemicals free cash flow has been 39% of its EBIT, less than we expected. It’s not great when it comes to paying down debt.

Our point of view

Air Products and Chemicals’ interest coverage suggests she can manage her debt as easily as Cristiano Ronaldo could score a goal against an Under-14 goalkeeper. And that’s just the start of the good news as its net debt to EBITDA is also very encouraging. Looking at all of the above factors together, it seems to us that Air Products and Chemicals can manage its debt quite comfortably. Of course, while this leverage can improve returns on equity, it comes with more risk, so it’s worth keeping an eye out for. When analyzing debt levels, the balance sheet is the obvious place to start. But at the end of the day, every business can contain risks that exist off the balance sheet. For example – Air Products and Chemicals has 1 warning sign we think you should be aware.

Of course, if you are the type of investor who prefers to buy stocks without going into debt, feel free to check out our exclusive list of cash net growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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Demystifying the “Debt Trap” Scenario – The Diplomat https://sharewared.com/demystifying-the-debt-trap-scenario-the-diplomat/ Fri, 07 Jan 2022 19:39:45 +0000 https://sharewared.com/demystifying-the-debt-trap-scenario-the-diplomat/ Advertising In the recent Diplomat article “Is ‘Chinese Debt Trap Diplomacy’ in Greenland Just on Ice? Greenland is claimed to be at “high risk” of falling into the Chinese debt trap as Beijing continues to expand its economic interests in the Arctic. In addition to the fact that the overall concept of China’s “debt trap […]]]>

In the recent Diplomat article “Is ‘Chinese Debt Trap Diplomacy’ in Greenland Just on Ice? Greenland is claimed to be at “high risk” of falling into the Chinese debt trap as Beijing continues to expand its economic interests in the Arctic. In addition to the fact that the overall concept of China’s “debt trap diplomacy” is the subject of considerable debate and re-examination based on recent research, a review of the political and economic situation in Greenland, as well as the current state of Chinese investment on the island, offers evidence that Greenland is at all vulnerable to current or future predatory Chinese lending practices.

First, Greenland has a very low debt-to-GDP ratio – in fact, Greenland would have the fourth-lowest debt-to-GDP ratio in the European Union, if Greenland were a member – and healthy public finances with a subsidy from Denmark. of about 20 percent of Greenland’s GDP.

The notion of a debt trap, including with regard to China, concerns countries which struggle to access regular financing, and Greenland does not fall into this category. Greenland is today far from being vulnerable to such a scenario. Greenland’s gross debt, including both national, municipal and state-owned corporate debt, stood at 27% of GDP in May 2021, and net debt at DKK 3.7 billion ($ 563 million ), which is equivalent to 18% of GDP. For comparison, Denmark has a gross debt of 42.1% of GDP and the European Union has a total of 90.1% of GDP. Internationally, Greenland has a very low debt-to-GDP ratio.

The original article asked if an independent Greenland could reject Chinese funding and thus avoid falling into the Chinese debt trap. In answering this question, the article claimed that “a majority” of Greenland’s GDP is financed by Denmark. Yet, as detailed in the latest figures (2020), direct subsidies from Denmark amounted to 3.959 billion crowns, or 19.67% of Greenland’s total GDP at 20.123 billion crowns. It could be argued that the actual number is closer to 25-30% of GDP, also including indirect spending, based on an estimate made on the 2014 report “Til Gavn for Grønland(“For the benefit of Greenland”) from the University of Copenhagen, but it is still far from being a majority, and this distinction is essential when considering whether Greenland is vulnerable to a future trauma of external debt after independence.

Second, Greenland’s current policy should be carefully considered when assessing the possibilities for future Chinese investments. After the Greenlandic elections in April 2021, Inuit Ataqatigiit formed a coalition with Naleraq, ousting the social democratic party Siumut. After leading government coalitions since 2013, Siumut had promoted the construction of three international airports (two large and one smaller), in Ilulissat, Nuuk and Qaqortoq, with the aim of allowing direct flights to regions likely to develop tourism. and enable the export of high quality fresh fish products directly to large urban markets. Siumut and its allies voted in 2013 to allow uranium mining to increase the chances of generating greater revenue for the Greenlandic Resource Fund, which would allow Greenland to quickly become financially and subsequently politically independent.

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IA favored a more cautious approach to both airports and mining, and during the election campaign the party mainly focused on the ambition to ban the rare earth element mining project and uranium at Kuannersuit near the town of Narsaq. This project was supervised by an Australian firm, in cooperation with the Chinese Shenghe Resources, but it is now on hold. In addition, the decision of the AI-led government to halt oil and gas exploration in Greenland has meant that the possibility of Chinese investments in fossil fuels has also waned. The only major mining project remaining in Greenland involving a Chinese partner is the planned zinc mine at Citronen Fjord, but its timing remains undecided, and even that project appears to be headed towards renewed interest in US investment in Greenland. China’s economic footprint in Greenland has shrunk significantly over the past two years, reducing the possibility that Beijing will have more say in Greenland’s economic affairs in the near term.

Claims that the controversy over the funding of the Chinese Communication Construction Company (CCCC) was due to the CCCC’s offer to finance the airport construction projects are misleading at best. The reality is more complicated, as the Greenlandic government has prequalified CCCC for airport projects, raising concerns in the Danes and the United States that this offer would include a pledge of funding. Yet the CCCC never made an offer of funding, nor did it state that it planned to do so. The then Danish Defense Minister, Claus Hjorth Frederiksen, even said that CCCC could build the airports without Danish interference, if the funding came from Danish and Greenlandic sources. Ultimately, CCCC decided not to make an offer in June 2019 after the Danish government offered its own financial support to the projects.

Third, the argument that climate change mitigation would be a financial burden for Greenland also needs a second examination. Climate change has two potential costs for Greenland. One of the costs involves the thawing of permafrost, which may lead to an increasing need for housing construction, but the overall cost would be funded by rent from government or municipality funded housing or would be owned by the private sector because people are building new houses on the basis of mortgages. The other cost is socio-economic. When fish stocks migrate north with increasing ocean temperatures, it becomes more difficult to make a living from inshore fishing for some areas while others benefit. This cost can be mitigated through relatively inexpensive policy measures such as re-educating the unemployed to work in tourism after the construction of new airports or through increased economic redistribution. However, increasing ocean temperatures are also bringing new species to Greenlandic waters, allowing for more extensive deep sea fishing, bringing new income to Greenland. So climate change will absolutely complicate Greenland’s economic mosaic in the years to come, but it ignores the fact that one of the outcomes will be the increased need for risky Chinese financing.

In summary, the scenario of the current Greenlandic finances leading to an independent, cash-strapped Greenland in the future does not sufficiently take into account economic realities or political interests. Almost all of the parties in favor of Greenland independence declare that political independence from Denmark requires prior financial independence. This is why the Greenlandic elections since Greenland and Denmark passed the Self-Government Act of 2009, granting Greenland self-determination, have focused on financial independence. There is no doubt that most Greenlanders vote for separatist parties, but almost all parties promote a responsible path to full autonomy by first developing strong finances. It’s also why mining at Kuannersuit has been a subject of division between historical coalition partners Siumut and IA, with Chinese company Shenghe ultimately caught in the middle.

Postulating a Chinese debt trap scenario for Greenland not only flies in the face of existing evidence, but it also fails to take into account Greenland’s commercial interests (including its current ‘open for business’ policy). , seeking a variety of different economic partners), Denmark’s continued policies to protect Greenland from perceived threats (including from Beijing) to its economic sovereignty, and the growing role of the United States, which over the years the past two years, have also sought to engage Greenland more directly, including potentially as an independent state. Given the current political (and environmental) state of the Arctic, it is important to avoid tropes and assumptions in understanding the challenges facing its people, including in the case of Greenland.


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Udaan Funding: Udaan Closes $ 200 Million Debt Financing Through Convertible Notes https://sharewared.com/udaan-funding-udaan-closes-200-million-debt-financing-through-convertible-notes/ Wed, 05 Jan 2022 16:35:00 +0000 https://sharewared.com/udaan-funding-udaan-closes-200-million-debt-financing-through-convertible-notes/ Bangalore: Business-to-business (B2B) e-commerce startup Udaan closed a $ 200 million debt financing round by issuing convertible notes to primarily five new investors, according to an internal company memo from CFO Aditya Pande. ET reviewed the content of the memo shared by Pande with employees on Wednesday. The names of the investors were not disclosed […]]]>
Bangalore: Business-to-business (B2B) e-commerce startup Udaan closed a $ 200 million debt financing round by issuing convertible notes to primarily five new investors, according to an internal company memo from CFO Aditya Pande.

ET reviewed the content of the memo shared by Pande with employees on Wednesday.

The names of the investors were not disclosed in the memo. People familiar with the matter said Tor Investment, Arena Investors and M&G Investments were among the new investors.

For Udaan, which has announced its intention to go public in the next 18-24 months, the decision to resort to debt financing through convertible notes appears important. These investors will have the option of converting their notes into shares, potentially before the IPO.

“We are thrilled and happy to share that we have five new top investors aboard the Udaan juggernaut, as part of our recently completed convertible note financing. This round was twice oversubscribed and also saw participation from our existing investors, including those who bought the company through the secondary round (Esop) in the first half of 2021, ”Pande said in his note.

According to him, the latest funding reflects Udaan’s “capitalization expansion strategy” as she begins her IPO journey. “With this convertible offering, we as a company have started to build a whole new muscle in our finance function – which we will continue to strengthen as we move forward,” added Pande. He was previously the CFO of Indigo, the airline.

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A spokesperson for Udaan declined to comment on its latest financing through convertible notes. Emails sent to investors named by those in the know went unanswered until press time on Wednesday.

Pande said in his memo that companies like Airbnb, Uber and Spotify had raised similar debt financing through convertible notes before their IPOs.

The Bengaluru-based company has also raised $ 50 million in traditional debt financing.

Udaan underwent a major change in its management last year. In September, one of its co-founders, Vaibhav Gupta, was appointed CEO of the company. At the time, Udaan said in an official statement that Sujeet Kumar and Amod Malviya, the other two co-founders, would support the functioning of a CEO-led organization and continue to shape the strategic roadmap and investment decisions. as active members of the board of directors.

According to sources, the Bengaluru-based company explored a fundraiser last year and appointed investment banker Goldman Sachs. But the company was unable to mop up equity funding at the time, sources told ET.

In January 2021, it raised $ 280 million as a continuation of its previous funding round of $ 585 million, after which it was valued at $ 3.1 billion. In total, he has now raised over $ 1 billion from investors such as DST Global, GGV Capital, Lightspeed Venture Partners, Altimeter Capital and Tencent.

Founded by former Flipkart executives Kumar, Gupta and Malviya, Udaan increasingly seeks to sell directly to customers through services like Pickily and Price Company, although its core business remains B2B commerce. In its core B2B business, it counts Reliance’s wholesale business among its competitors.

The company had recovered the figures from before the second wave of Covid in July of last year. Aided by the pandemic, food continues to be its fastest growing segment, while pharmaceuticals are currently another area of ​​focus. In addition to these segments, Udaan’s B2B business operates in segments such as fashion, electronics and appliances, home and kitchen, footwear and electrical.

ET first reported in November that the company was entering the consumer-focused grocery business through the group or community buying model with a new platform called Price Company, similar to Chinese company Pinduoduo.

While Pickily is an online supermarket app for Level I customers, Price Company is a group buying platform to serve customers beyond major cities. ET had reported that Udaan aimed to leverage its existing supply chain network in these markets to rapidly expand the new business in 2022. Pickily has a presence in parts of Bengaluru and Hyderabad.

Udaan has around 3 million users, 2 million retailers and 30,000 B2B commerce sellers. It is currently present in around 1,000 towns and villages through 12,000 PIN codes. Given his optimism about Price Company, he aims to bring Price Company to 1,500 cities by December of this year, ET reported in November.


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AMC’s New Year’s Resolution: Refinancing High Interest Debt https://sharewared.com/amcs-new-years-resolution-refinancing-high-interest-debt/ Mon, 03 Jan 2022 18:19:00 +0000 https://sharewared.com/amcs-new-years-resolution-refinancing-high-interest-debt/ AMC Entertainment AMC -1.43% Holdings Inc. CEO Adam Aron said on Monday he wanted to refinance some of the company’s expensive debt to reduce its interest exposure, push back some multi-year debt maturities and relax covenants. “In 2020 and early 2021, AMC took on high interest rate debt to survive,” Mr. Aron said on his […]]]>

AMC Entertainment AMC -1.43%

Holdings Inc. CEO Adam Aron said on Monday he wanted to refinance some of the company’s expensive debt to reduce its interest exposure, push back some multi-year debt maturities and relax covenants.

“In 2020 and early 2021, AMC took on high interest rate debt to survive,” Mr. Aron said on his Twitter account, which was disclosed by the company in a filing with Securities. and Exchange Commission of the United States.

One of the reasons companies seek to restructure their debt is to take advantage of improving market conditions. In AMC’s case, the theater chain’s quarterly loss declined in the second half of last year as people continued to return to theaters. AMC said last month that “Spider-Man: No Way Home” was the highest-grossing film title on its opening night in AMC history for the month of December.

Despite AMC’s improving outlook, the company will still have to convince its lenders to agree to postpone debt maturities and extend covenants suspensions.

“There is no guarantee of success, but we will do our best to achieve it. We are always thinking about creative ways to secure AMC’s future, ”added Mr. Aron.

AMC shares gave up their morning gains and fell about 1% on Monday afternoon after falling nearly 25% in the past three months.

AMC, based in Leawood, Kansas, was already in debt and was losing money after a series of acquisitions that made it the largest theater chain in the world before the Covid-19 pandemic hit. The company entered the pandemic with $ 4.9 billion in debt.

The company has warned of possible bankruptcy in late 2020, but was able to avoid seeking protections by raising nearly $ 1 billion in debt and equity from risk-hungry investors.

AMC’s efforts to avoid bankruptcy have been aided by so-called meme stock traders who have crammed into AMC stock, GameStop Corp. and other popular targets.

Under Mr. Aron’s leadership, AMC took the opportunity to raise funds by selling more shares and reducing its debt.

As of September 30, AMC said it had $ 5.4 billion in business loans and near-record liquidity of over $ 1.8 billion, which includes cash and revolving lines of credit. not used. When the company released its latest quarterly results in November, Mr. Aron said he did not expect the company to need to borrow against these lines of credit in the next 12 months.

The GameStop frenzy has brought to light a growing group of investors who research and share business information on social media platforms such as YouTube and TikTok. Three investors explain how these online communities help them conquer the market. Photographic illustration: Adam Falk / The Wall Street Journal

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Is Ceridian HCM Holding (NYSE: CDAY) Using Too Much Debt? https://sharewared.com/is-ceridian-hcm-holding-nyse-cday-using-too-much-debt/ Sat, 01 Jan 2022 15:09:01 +0000 https://sharewared.com/is-ceridian-hcm-holding-nyse-cday-using-too-much-debt/ David Iben put it well when he said, “Volatility is not a risk we care about. What matters to us is to avoid the permanent loss of capital. ‘ When we think about how risky a business is, we always like to look at its use of debt because debt overload can lead to bankruptcy. […]]]>

David Iben put it well when he said, “Volatility is not a risk we care about. What matters to us is to avoid the permanent loss of capital. ‘ When we think about how risky a business is, we always like to look at its use of debt because debt overload can lead to bankruptcy. Above all, Ceridian HCM Holding inc. (NYSE: CDAY) carries debt. But the real question is whether this debt makes the business risky.

When is Debt a Problem?

Generally speaking, debt only becomes a real problem when a company cannot repay it easily, either by raising capital or with its own cash flow. If things really go wrong, lenders can take over the business. While it’s not too common, we often see indebted companies continually diluting their shareholders because lenders are forcing them to raise capital at a ridiculous price. Of course, many companies use debt to finance their growth without negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash flow and debt together.

What is the debt of Ceridian HCM Holding?

As you can see below, at the end of September 2021, Ceridian HCM Holding was in debt of US $ 1.12 billion, up from US $ 955.5 million a year ago. Click on the image for more details. However, it has $ 378.8 million in cash offsetting that, leading to net debt of around $ 741.4 million.

NYSE: CDAY Debt to equity history January 1, 2022

How healthy is Ceridian HCM Holding’s balance sheet?

The latest balance sheet data shows Ceridian HCM Holding had liabilities of US $ 5.55 billion due within one year, and liabilities of US $ 1.22 billion due thereafter. In return, he had $ 378.8 million in cash and $ 116.6 million in receivables due within 12 months. Its liabilities therefore total $ 6.28 billion more than the combination of its cash and short-term receivables.

While that might sound like a lot, it’s not that big of a deal since Ceridian HCM Holding has a massive market capitalization of US $ 15.8 billion, so it could probably strengthen its balance sheet by raising capital if needed. But it is clear that it is absolutely necessary to take a close look at whether it can manage its debt without dilution. When analyzing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Ceridian HCM Holding’s ability to maintain a healthy balance sheet going forward. So if you are focused on the future you can check this out free report showing analysts’ earnings forecasts.

Over the past year, Ceridian HCM Holding has not been profitable on EBIT level, but has managed to increase its revenue by 15%, to US $ 965 million. We generally like to see unprofitable businesses growing faster, but each in their own way.

Emptor Warning

It is important to note that Ceridian HCM Holding recorded a loss of earnings before interest and taxes (EBIT) during the past year. To be precise, the EBIT loss amounted to US $ 26 million. When we look at this and recall the liabilities on its balance sheet, versus the cash flow, it seems unwise to us that the company has debt. Quite frankly, we think the record is far from up to par, although it could improve over time. However, it doesn’t help that he spent $ 90 million in cash in the past year. Suffice it to say that we consider the action to be risky. The balance sheet is clearly the area to focus on when analyzing debt. However, not all investment risks lie on the balance sheet – far from it. For example – Ceridian HCM Holding has 3 warning signs we think you should be aware.

At the end of the day, it’s often best to focus on businesses that don’t have net debt. You can access our special list of these companies (all with a history of profit growth). It’s free.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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We believe that SSE (LON: SSE) can stay on top of its debt https://sharewared.com/we-believe-that-sse-lon-sse-can-stay-on-top-of-its-debt/ Fri, 31 Dec 2021 05:30:23 +0000 https://sharewared.com/we-believe-that-sse-lon-sse-can-stay-on-top-of-its-debt/ Berkshire Hathaway’s Charlie Munger-backed external fund manager Li Lu is quick to say this when he says “The biggest risk in investing is not price volatility, but if you will suffer a loss. permanent capital “. When we think about how risky a business is, we always like to look at its use of debt […]]]>

Berkshire Hathaway’s Charlie Munger-backed external fund manager Li Lu is quick to say this when he says “The biggest risk in investing is not price volatility, but if you will suffer a loss. permanent capital “. When we think about how risky a business is, we always like to look at its use of debt because debt overload can lead to bankruptcy. Above all, SSE plc (LON: SSE) is in debt. But the real question is whether this debt makes the business risky.

When is debt dangerous?

Debts and other liabilities become risky for a business when it cannot easily meet these obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that he has to raise new equity at low cost, thereby constantly diluting shareholders. By replacing dilution, however, debt can be a very good tool for companies that need capital to invest in growth at high rates of return. When we think of a business’s use of debt, we first look at cash flow and debt together.

See our latest analysis for ESS

How much debt does SSE have?

The image below, which you can click for more details, shows SSE owed £ 9.21bn in debt at the end of September 2021, a reduction from £ 9.63bn over a year. However, as it has a cash reserve of £ 232.7million, its net debt is less, at around £ 8.97 billion.

LSE: SSE History of debt to equity December 31, 2021

How healthy is the SSE balance sheet?

The latest balance sheet data shows SSE had a liability of £ 5.57 billion maturing within one year, and a liability of £ 10.7 billion maturing after that. In return, he had £ 232.7 million in cash and £ 1.67 billion in receivables due within 12 months. Its liabilities therefore total £ 14.4 billion more than the combination of its cash and short-term receivables.

This deficit is sizable compared to its very large market capitalization of £ 17.5 billion, so he suggests shareholders keep an eye on SSE’s use of debt. This suggests that shareholders would be greatly diluted if the company needed to consolidate its balance sheet quickly.

We use two main ratios to inform us about the levels of debt compared to earnings. The first is net debt divided by earnings before interest, taxes, depreciation, and amortization (EBITDA), while the second is the number of times its earnings before interest and taxes (EBIT) covers its interest expense (or its coverage of interest, for short). The advantage of this approach is that we take into account both the absolute amount of debt (with net debt versus EBITDA) and the actual interest charges associated with this debt (with its coverage rate). interests).

SSE has a net debt to EBITDA of 2.6, which suggests that it uses good leverage to increase returns. But the high interest coverage of 9.9 suggests that he can easily pay off that debt. Fortunately, SSE is growing its EBIT faster than former Australian Prime Minister Bob Hawke, gaining 151% in the past twelve months. There is no doubt that we learn the most about debt from the balance sheet. But it is future profits, more than anything, that will determine SSE’s ability to maintain a healthy balance sheet in the future. So, if you want to see what the professionals think, you might find this free Analyst Profit Forecast report interesting.

Finally, while the IRS may love accounting profits, lenders only accept hard cash. The logical step is therefore to examine the proportion of this EBIT that corresponds to the actual free cash flow. Over the past three years, SSE has created free cash flow of 17% of its EBIT, a performance without interest. This low level of cash conversion undermines its ability to manage and repay its debts.

Our point of view

Based on our analysis, SSE’s EBIT growth rate should indicate that it will not have too many problems with its debt. But the other factors we noted above weren’t so encouraging. For example, it looks like he has to struggle a bit to convert EBIT to free cash flow. We would also like to note that companies in the electric utility sector like SSE generally use debt with no problem. Looking at all this data, we feel a little cautious about the debt levels of the ESS. While debt has its advantage in potential higher returns, we believe shareholders should definitely consider how leverage levels might make the stock riskier. When analyzing debt levels, the balance sheet is the obvious place to start. But at the end of the day, every business can contain risks that exist off the balance sheet. These risks can be difficult to spot. Every business has them, and we’ve spotted 5 warning signs of SSE (2 of which make us uncomfortable!) to know.

Of course, if you are the type of investor who prefers to buy stocks without going into debt, feel free to check out our exclusive list of cash net growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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Landing in Vacation Debt? Your payment plan in 5 points https://sharewared.com/landing-in-vacation-debt-your-payment-plan-in-5-points/ Wed, 29 Dec 2021 16:00:24 +0000 https://sharewared.com/landing-in-vacation-debt-your-payment-plan-in-5-points/ Image source: Getty Images Many people make a commitment not to overdo it during the holidays, only to end up in debt at the end of the season. If this has happened to you this year, don’t worry. First of all, you are undoubtedly in good company. But also, sales have been more difficult to […]]]>

Image source: Getty Images

Many people make a commitment not to overdo it during the holidays, only to end up in debt at the end of the season. If this has happened to you this year, don’t worry.

First of all, you are undoubtedly in good company. But also, sales have been more difficult to achieve this year due to supply chain issues and inflation, so you might have had a harder time staying on a budget.

If you’re starting 2022 with a bunch of vacation debt, you’ll want to get rid of it as quickly as possible. The longer you carry this debt, the more interest you will accumulate and the more it could hurt your credit score. Here are five steps to get rid of your vacation debt quickly and effectively.

1. Look at the big picture

Knowing the amount of your accumulated debt is your first step in paying it off. Take a look at your different credit cards and see what your balances entail. Knowing this total will help you better manage your debt.

2. See if there is a more affordable payment method.

If you have billed your vacation expenses on various credit cards, you could now be facing pretty high interest rates on your debt. If so, lowering those interest rates will make your debt easier and more affordable to pay off.

One option to consider in this regard is a balance transfer, where you transfer your various balances to a single card with a lower interest rate (or, ideally, an introductory rate of 0%). Another option is to take out a personal loan, use it to pay off your debt, and then pay off that loan at an interest rate that should be lower.

3. Rework your budget

You may need to cut back on some short-term expenses to free up money for debt repayment purposes. Take a look at your budget and see which expense categories are considered non-essential. Then consider cutting back on spending in these areas until you’ve reduced your debt.

4. Treat yourself

You might not have a lot of expenses in your budget to cut back. Or maybe you just don’t want to ditch your streaming services, morning coffee, and weekly take out dinner. If so, getting a little boost could help you pay off your vacation debt fast. Since this income will not be applied to other bills, you can use it to reduce your balance.

5. Get cash for holiday gifts you received but don’t want

The personalized knit sweater with your name on it that your aunt made is a holiday gift you’re probably stuck with. But if you’ve received gifts that you don’t really want or need, selling them for cash could leave you with a good amount of money to pay off your debt.

If you have gift cards in stores that you don’t really frequent, there are sites like cardcash.com that allow you to redeem them for cash. And you can sell electronics, clothing, and other items online through your local social media market page. Or have a good old fashioned garage sale.

Starting the New Year with vacation debt might not be ideal. But if this is the situation you find yourself in, don’t despair. If you are committed to paying off your debt, you might be surprised how quickly you can get rid of it. And once you do, you’ll be in a good position to start saving for next year’s vacation to avoid a repeat.

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We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the included advertisers. The Ascent does not cover all the offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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Golden Dawn announces debt restructuring deal https://sharewared.com/golden-dawn-announces-debt-restructuring-deal/ Mon, 27 Dec 2021 19:50:00 +0000 https://sharewared.com/golden-dawn-announces-debt-restructuring-deal/ This press release, required by applicable Canadian law, is not intended for distribution to United States news organizations or for distribution in the United States. VANCOUVER, BC / ACCESSWIRE / December 27, 2021 / Golden Dawn Minerals Inc., (TSXV: GOM, OTC: GDMRF, FRANKFURT: 3G8B)), (“golden twilight” and the “Society“), is pleased to announce that it […]]]>

This press release, required by applicable Canadian law, is not intended for distribution to United States news organizations or for distribution in the United States.

VANCOUVER, BC / ACCESSWIRE / December 27, 2021 / Golden Dawn Minerals Inc., (TSXV: GOM, OTC: GDMRF, FRANKFURT: 3G8B)), (“golden twilight” and the “Society“), is pleased to announce that it has accepted the terms of a new debt reorganization agreement (the”Debt reorganization agreement“) with its senior secured lender, RIVI Opportunity Fund, LP, (“RIVI“). The Debt Reorganization Agreement gives the Company renewed certainty as to the management and repayment of its obligations to RIVI, currently composed of the following elements:

  • Principal advance of US $ 4,000,000 for a stream of metal purchased, bearing interest at an annual rate of 16.0%, under a gold purchase agreement dated December 23, 2016 (as amended) ( the “GPA“), as well as all interest, fees, penalties and other charges payable (the”GPA Debt“);
  • Principal advance of US $ 1,000,000, bearing interest at an annual rate of 20.0%, evidenced by a promissory note dated May 4, 2018, together with all interest, fees, penalties and other accrued charges (the “Note on indebtedness“); and
  • Various other demand loan advances from RIVI and certain of its associates, bearing interest at an annual rate of 14.0%, totaling approximately US $ 306,000, together with all interest, fees, penalties and other accrued charges (the “Other debts“).

(together, the “RIVI Debt“)

Pursuant to the Debt Reorganization Agreement, the Company may pay note debt and other indebtedness, as well as all other interest, fees, penalties and accrued liabilities under RIVI Debt for payments totaling US $ 2,006,000 as follows:

  • The Company will make an initial cash payment to RIVI of US $ 306,000 on cash on hand by December 29, 2021 in full and final settlement of the Other Debt.
  • The Company will be entitled to settle the full amount of the debt in the form of Notes, plus all other interest, fees, penalties and accrued liabilities under the RIVI Debt, by making the following payments totaling $ 1.70 million US: (i) an upfront payment of C $ 500,000 no later than February 15, 2022, (ii) thereafter, monthly payments of at least US $ 50,000 each, effective March 1, 2022, and ( iii) a final lump sum payment of the then remaining balance of US $ 1.70 million no later than February 1, 2023.

In addition, the AMP is amended such that RIVI’s right to produce gold from the Company’s Lexington and Golden Crown projects (together, the “Projects“) is reduced from 15.0% to 10.0% of total gross production combined with the addition of a 2.0% NSR on gold produced at the Lexington plant. The price of the stream remains unchanged at the lessor of a gold equivalent price per ounce of US $ 400, or 80% of the market price of gold, for the life of the projects (the “Gold purchase flow“) The Company will have the option to repurchase the Gold Purchase Stream, and otherwise to fully and definitively satisfy the remaining GPA debt and other obligations to RIVI under the AMP, for an option payment. in one-time cash grant of US $ 6.0 million, exercisable at any time before December 31, 2022. If the Company elects not to exercise this option, the 10.0% gold purchase stream will remain in place and the Company will continue to have the right to repurchase the 50% gold purchase stream in accordance with the current AMP.

As long as the Company remains in compliance with the conditions described above of the Debt Reorganization Agreement, all interest, fees, penalties and other charges payable on the RIVI Debt will be waived, and RIVI’s ‘will refrain from declaring a defect of Golden Dawn. or assert one of its securities against the Company or its assets.

On behalf of the Board of Directors of GOLDEN DAWN MINERALS INC.

Through: “Christophe Anderson”
CHRISTOPHER ANDERSON
Chief executive officer

For more information, please contact:
Golden Dawn Minerals Inc. – Corporate Communications:
Phone. : Phone. : 604-488-3900
Email: office@goldendawnminerals.com

Cautions Regarding Forward-Looking Statements: This press release contains certain “forward-looking statements” within the meaning of Canadian securities laws, including statements regarding the Debt Reorganization Agreement, including the Company’s payment obligations, and the plans of the Company. company to increase resource estimates and bring projects into production. Although the Company believes these statements to be reasonable, it cannot guarantee that these expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are usually, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intention”, “estimates”, “projects”, “objectives”, “potential” “,” Objective “,” objective “,” prospective “and similar expressions, or that events or conditions” will “,” would be “,” could “,” may “,” could “or” should “occur , or are those statements which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the management of the Company at the date the statements are made and that they involve a number of risks and considerations. ‘uncertainties. Accordingly, there can be no assurance that such statements will prove to be accurate and that actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company assumes no obligation to update these forward-looking statements if the beliefs, estimates or opinions of management, or of other factors, had to change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include the possibility that the Company may not be able to raise sufficient funding to continue to fund its critical dewatering commitments, security and assurance with respect to the Lexington and Golden Crown properties and the Greenwood processing plant, that the Company will not be able to obtain sufficient financing to meet, effect some or all debt payments and options to RIVI required to execute the Debt Reorganization Agreement, or the Company will encounter financing, geological, technical or permitting problems preventing it from achieving its development objectives. Readers are referred to the Company’s reports, available to the public through the Canadian Securities Administrators’ Electronic Data Analysis and Research System (SEDAR) at www.sedar.com for a more complete discussion of these risk factors and their potential effects.

THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE, NOR THAT THERE WILL BE NO SALE OF SECURITIES OF THE COMPANY IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE MAY BE. ILLEGAL BEFORE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

THE SOURCE: Golden Dawn Minerals Inc.

See the source version on accesswire.com:
https://www.accesswire.com/679785/Golden-Dawn-Announces-DebtRestructuring-Agreement


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Here’s Why Shanghai Fudan Microelectronics Group (HKG: 1385) Can Responsibly Manage Debt https://sharewared.com/heres-why-shanghai-fudan-microelectronics-group-hkg-1385-can-responsibly-manage-debt/ Sun, 26 Dec 2021 00:14:03 +0000 https://sharewared.com/heres-why-shanghai-fudan-microelectronics-group-hkg-1385-can-responsibly-manage-debt/ Howard Marks put it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about … and every investor practice that I know is worried. So it seems like smart money knows that debt – which is usually involved in bankruptcies – is […]]]>

Howard Marks put it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about … and every investor practice that I know is worried. So it seems like smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess the level of risk of a business. Above all, Shanghai Fudan Microelectronics Group Company Limited (HKG: 1385) carries a debt. But should shareholders be concerned about its use of debt?

When is debt dangerous?

Debts and other liabilities become risky for a business when it cannot easily meet these obligations, either with free cash flow or by raising capital at an attractive price. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are ruthlessly liquidated by their bankers. However, a more common (but still costly) situation is where a company has to dilute its shareholders at a cheap share price just to get its debt under control. Of course, the advantage of debt is that it often represents cheap capital, especially when it replaces dilution of a business with the ability to reinvest at high rates of return. When we think of a business’s use of debt, we first look at cash flow and debt together.

Check out our latest review for Shanghai Fudan Microelectronics Group

What is the net debt of the Shanghai Fudan Microelectronics group?

The image below, which you can click for more details, shows that in September 2021, Shanghai Fudan Microelectronics Group had CN 63.3 million in debt, down from zero in a year. But it also has CN 1.14 billion in cash to make up for that, which means it has a net cash position of CN 1.07 billion.

SEHK: 1385 Debt to equity history December 26, 2021

How healthy is the Shanghai Fudan Microelectronics Group balance sheet?

We can see from the most recent balance sheet that the Shanghai Fudan Microelectronics Group had CN 676.3 million liabilities due within one year, and CN 137.3 million liabilities due beyond. . On the other hand, he had CN 1.14 billion in cash and CN 864.6 million in receivables due within one year. So he actually CN ¥ 1.19b Following liquid assets as total liabilities.

This short-term liquidity is a sign that Shanghai Fudan Microelectronics Group could likely repay its debt with ease, as its balance sheet is far from tight. Put simply, the fact that the Shanghai Fudan Microelectronics Group has more cash than debt is probably a good indication that it can manage its debt safely.

Better yet, Shanghai Fudan Microelectronics Group increased its EBIT by 631% last year, which is an impressive improvement. If sustained, this growth will make debt even more manageable in the years to come. When analyzing debt levels, the balance sheet is the obvious place to start. But ultimately, the company’s future profitability will decide whether Shanghai Fudan Microelectronics Group can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free Analyst Profit Forecast report interesting.

Finally, a business can only pay off its debts with hard cash, not with book profits. The Shanghai Fudan Microelectronics Group may have net cash on the balance sheet, but it is always interesting to examine the extent to which the company converts its earnings before interest and taxes (EBIT) into free cash flow, as this will influence both its needs in its ability to manage debt. Over the past two years, Shanghai Fudan Microelectronics Group has generated free cash flow of 17% of its EBIT, a performance of no interest. For us, the conversion to cash that elicits a bit of paranoia is the ability to extinguish debt.

In summary

While it is always a good idea to investigate a company’s debt, in this case the Shanghai Fudan Microelectronics Group has a net cash position of NC 1.07 billion and a decent balance sheet. And it impressed us with its EBIT growth of 631% over last year. We therefore do not believe that the use of debt by the Shanghai Fudan Microelectronics Group is risky. There is no doubt that we learn the most about debt from the balance sheet. However, not all investment risks lie on the balance sheet – far from it. Concrete example: we have spotted 2 warning signs for Shanghai Fudan Microelectronics Group you must be aware.

Of course, if you are the type of investor who prefers to buy stocks without going into debt, feel free to check out our exclusive list of cash net growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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