ASX:MXR Historical Debt Dec 26th 17
Does MXR’s liquid assets cover its short-term commitments?
Given zero long-term debt on its balance sheet, Maximus Resources has no solvency issues, which is used to describe the company’s ability to meet its long-term obligations. But another important aspect of financial health is liquidity: the company’s ability to meet short-term obligations, including payments to suppliers and employees. Looking at MXR’s most recent A$0.9M liabilities, the company has not been able to meet these commitments with a current assets level of A$0.3M, leading to a 0.33x current account ratio. which is under the appropriate industry ratio of 3x.
Next Steps:
Are you a shareholder? Having no debt on the books means MXR has more financial freedom to keep growing at its current fast rate. However, the company’s low liquidity reduces our confidence around meeting short-term commitments. Some level of low-cost debt funding could help address these needs. ] %} Moving forward, its financial position may change. You should always be keeping on top of market expectations for MXR’s future growth.
Are you a potential investor? MXR’s high growth makes financial flexibility an attractive option. However, should adverse events arise, the company may be pressed to meet its short-term obligations due to its low-liquidity asset composition. You should continue your analysis by taking a look at MXR’s past performance to conclude on MXR’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.