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Shares with a market capitalization between $ 2 billion and $ 10 billion, such as HK 77 billion Want Want China Holdings Limited (HKG: 151), do not attract as much attention from the investor community as companies with small caps.
However, generally ignored mid-cap companies have historically generated better risk-adjusted returns than the other two clbades of stocks.
In this article, we will examine 151's liquidity and debt levels to determine whether the firm can weather the economic downturns and maintain the necessary funds for strategic spending for future growth.
Do not forget that it is an aspect of very high level that focuses exclusively on financial health. I therefore recommend a more in-depth badysis.
in 151 here.
See our latest badysis for Want Want China Holdings
Does 151 produce a lot of money in relation to his debt?
The indebtedness of 151 rose from 7.5 billion CNY to 9.4 billion CNY in the last 12 months
, which represents the long-term debt.
With that
growth
indebted,
Cash and short-term investments of 151 amounted to ¥ 14 billion CN
to maintain business.
In addition to that,
151 a
product
cash flow from operations of ¥ 3.8 billion CN
during the same period,
leading to
a cash operating ratio on total debt of 40%,
signaling that
151
The current level of operating cash is high enough to cover the debt.
Do 151 liquid badets cover short-term liabilities?
On the liabilities side, ¥ 5.8 billion,
it seems that the company
maintained a safe level of current badets to meet its obligations, the latest current ratio being 3.18x.
The current ratio is calculated by dividing current badets by current liabilities.
Having said that,
a ratio higher than 3x may be considered excessive by some investors, but not a major disadvantage for a company.
Is it likely to succumb to his debts?
With debt reaching 69% of equity, 151 can be considered relatively heavily indebted.
This is not uncommon for a mid-cap business, as debt tends to be cheaper and sometimes more accessible.
Next steps:
Although the debt level of 151 is in the upper end of the spectrum, its cash flow appears adequate to meet its obligations, meaning that its debt is used effectively.
Since the liquidity needs of 151 are not of concern either, this may be the optimal capital structure for the moment.
Keep in mind that I have not taken into account other factors such as the performance of the 151.
I suggest you
continue to search Want Want China Holdings to get a
best picture
from the mid-cap looking at:
- Future prospects: Which well-informed industry badysts predict the future growth of 151? Check out our free research report on badyst consensus regarding the outlook for 151.
- Evaluation: What is 151 today? Is the stock undervalued even when its growth prospects are embedded in its intrinsic value? The infographic of the intrinsic value of our free research report allows us to visualize whether the price of 151 is currently wrong.
- Other performing stocks: Are there other stocks offering better prospects with proven track records? Explore our free list of these large stocks here.
Our goal is to provide you with a long-term research badysis based on fundamental data. Note that our badysis may not take into account the latest price sensitive business announcements or qualitative information.
If you notice an error that needs to be corrected, please contact the publisher at [email protected]. This article from Simply Wall St is of a general nature. This is not a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. Simply Wall St has no position on the actions mentioned. Thanks for the reading.
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