TSX:BAA Historical Debt Nov 29th 17
Can BAA service its debt comfortably?
With debt reaching 94.27% of equity, BAA may be thought of as relatively highly levered. This is not uncommon for a small-cap company given that debt tends to be lower-cost and at times, more accessible. Though, since BAA is presently unprofitable, sustainability of its current state of operations becomes a concern. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.
Next Steps:
Are you a shareholder? BAA’s high debt levels is not met with high cash flow coverage. This leaves room for improvement in terms of debt management and operational efficiency. In addition to this, the company may struggle to meet its near term liabilities should an adverse event occur. Moving forward, BAA’s financial situation may change. I suggest keeping on top of market expectations for BAA’s future growth on our free analysis platform.
Are you a potential investor? BAA’s large debt ratio along with low cash coverage of debt as well as low liquidity coverage of short-term expenses may scare some investors away intially. But, keep in mind that this is a point-in-time analysis, and today’s performance may not be representative of BAA’s track record. I encourage you to continue your research by taking a look at BAA’s past performance analysis on our free platform to conclude on BAA’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.