ASX:TRY Historical Debt Nov 22nd 17
Can TRY pay its short-term liabilities?
Looking at TRY’s most recent A$70M liabilities, it seems that the business has not been able to meet these commitments with a current assets level of A$27M, leading to a 0.39x current account ratio. which is under the appropriate industry ratio of 3x.
Can TRY service its debt comfortably?
With debt reaching 50.12% of equity, TRY may be thought of as relatively highly levered. This is not unusual for small-caps as debt tends to be a cheaper and faster source of funding for some businesses. However, since TRY is presently loss-making, sustainability of its current state of operations becomes a concern. Maintaining a high level of debt, while revenues are still below costs, can be dangerous as liquidity tends to dry up in unexpected downturns.
Next Steps:
Are you a shareholder? At its current level of cash flow coverage, TRY has room for improvement to better cushion for events which may require debt repayment. Furthermore, the company may struggle to meet its near term liabilities should an adverse event occur. Given that TRY’s financial situation may change. I suggest keeping abreast of market expectations for TRY’s future growth on our free analysis platform.
Are you a potential investor? TRY’s large debt ratio along with poor cash coverage as well as low liquidity coverage of short-term obligations may send potential investors running the other way. However, keep in mind that this is a point-in-time analysis, and today’s performance may not be representative of TRY’s track record. I encourage you to continue your research by taking a look at TRY’s past performance analysis on our free platform to conclude on TRY’s financial health.
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.