TSXV:CNG Historical Debt Nov 14th 17
More Unxpected adverse events, such as natural disasters and wars, can be a true test of a company’s capacity to meet its obligations. These adverse events bring devastation and yet does not absolve the company from its debt. Can CNG pay off what it owes to its debtholder by using only cash from its operational activities? CNG’s recent operating cash flow was -0.98 times its debt within the past year. This means what CNG can generate on an annual basis, which is currently a negative value, does not cover what it actually owes its debtors in the near term. This raises a red flag, looking at CNG’s operations at this point in time.
Can CNG meet its short-term obligations with the cash in hand? What about its other commitments such as payments to suppliers and salaries to its employees? As cash flow from operation is hindered by adverse events, CNG may need to liquidate its short-term assets to meet these upcoming payments. We should examine if the company’s cash and short-term investment levels match its current liabilities. Our analysis shows that CNG is able to meet its upcoming commitments with its cash and other short-term assets, which lessens our concerns for the company’s business operations should any unfavourable circumstances arise.
Can CNG service its debt comfortably? A substantially higher debt poses a significant threat to a company’s profitability during a downturn. CNG’s debt-to-equity ratio stands at 15.95%, which indicates that its debt is at an acceptable level.
Next Steps: Are you a shareholder? CNG’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise. Though, the company will be able to pay all of its upcoming liabilities from its current short-term assets. Given that its financial position may be different. You should always be keeping on top of market expectations for CNG’s future growth on our free analysis platform .
Are you a potential investor? Canadian Mining currently has financial flexibility to ramp up growth in the future. Furthermore, its high liquidity means the company should continue to operate smoothly in the case of adverse events. To gain more conviction in the stock, you need to also examine CNG’s track record. I encourage you to continue your research by taking a look at CNG’s past performance analysis on our free platform to figure out CNG’s financial health position.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned.