ASX:WLF Historical Debt Jan 4th 18
Does WLF face the risk of succumbing to its debt-load?
With total debt exceeding equities, WLF is considered a highly levered company. This is not unusual for small-caps as debt tends to be a cheaper and faster source of funding for some businesses. However, since WLF 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? WLF’s high debt level indicates room for improvement. Furthermore, its cash flow coverage of less than a quarter of debt means that operating efficiency could also be an issue. In addition to this, the company may not be able to pay all of its upcoming liabilities from its current short-term assets. Going forward, its financial position may be different. You should always be researching market expectations for WLF’s future growth on our free analysis platform.
Are you a potential investor? WLF’s high debt levels on top of poor cash coverage as well as low liquidity coverage of near-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 WLF’s track record. As a following step, you should take a look at WLF’s past performance analysis on our free platform to figure out WLF’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.