![]() ![]() 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. This article by Simply Wall St is general in nature. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. Valuation is complex, but we're helping make it simple.įind out whether Aurubis is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health. 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. ![]() For instance, we've identified 3 warning signs for Aurubis (1 doesn't sit too well with us) you should be aware of. But ultimately, every company can contain risks that exist outside of the balance sheet. The balance sheet is clearly the area to focus on when you are analysing debt. So while Aurubis does not have a great balance sheet, it's certainly not too bad. Summing UpĪlthough Aurubis's balance sheet isn't particularly strong, due to the total liabilities, it is clearly positive to see that it has net cash of €291.0m. That weak cash conversion makes it more difficult to handle indebtedness. Looking at the most recent three years, Aurubis recorded free cash flow of 36% of its EBIT, which is weaker than we'd expect. Aurubis may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.īut our final consideration is also important, because a company cannot pay debt with paper profits it needs cold hard cash. But it is future earnings, more than anything, that will determine Aurubis's ability to maintain a healthy balance sheet going forward. When a company sees its earnings tank, it can sometimes find its relationships with its lenders turn sour. ![]() In fact Aurubis's saving grace is its low debt levels, because its EBIT has tanked 48% in the last twelve months. Despite its noteworthy liabilities, Aurubis boasts net cash, so it's fair to say it does not have a heavy debt load! ![]() But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. While this might seem like a lot, it is not so bad since Aurubis has a market capitalization of €3.72b, and so it could probably strengthen its balance sheet by raising capital if it needed to. So it has liabilities totalling €1.75b more than its cash and near-term receivables, combined. Offsetting this, it had €540.0m in cash and €902.0m in receivables that were due within 12 months. Zooming in on the latest balance sheet data, we can see that Aurubis had liabilities of €2.24b due within 12 months and liabilities of €957.0m due beyond that. XTRA:NDA Debt to Equity History March 31st 2023 How Strong Is Aurubis' Balance Sheet? But it also has €540.0m in cash to offset that, meaning it has €291.0m net cash. See our latest analysis for Aurubis What Is Aurubis's Debt?Īs you can see below, Aurubis had €249.0m of debt at December 2022, down from €367.0m a year prior. The first thing to do when considering how much debt a business uses is to look at its cash and debt together. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. 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. If things get really bad, the lenders can take control of the business. But should shareholders be worried about its use of debt? When Is Debt A Problem?ĭebt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. We note that Aurubis AG ( ETR:NDA) does have debt on its balance sheet. Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' 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. ![]()
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