TSXV:GQ Historical Debt Nov 29th 17
Is GQ’s level of debt at an acceptable level?
With debt reaching 67.45% of equity, GQ 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. However, since GQ is currently unprofitable, there’s a question of sustainability of its current operations. 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? GQ’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 change. I suggest keeping on top of market expectations for GQ’s future growth on our free analysis platform.
Are you a potential investor? Though near-term liquidity isn’t an issue, GQ’s large debt ratio on top of poor cash coverage may not build the strongest investment case. However, keep in mind that this is a point-in-time analysis, and today’s performance may not be representative of GQ’s track record. As a following step, you should take a look at GQ’s past performance analysis on our free platform to conclude on GQ’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.