NYSE:BW Historical Debt Feb 2nd 18
Is BW’s debt level acceptable?
With a debt-to-equity ratio of 71.13%, BW can be considered as an above-average leveraged company. This is not uncommon for a small-cap company given that debt tends to be lower-cost and at times, more accessible. Though, since BW is currently 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:
At its current level of cash flow coverage, BW has room for improvement to better cushion for events which may require debt repayment. However, the company exhibits an ability to meet its near term obligations should an adverse event occur. This is only a rough assessment of financial health, and I’m sure BW has company-specific issues impacting its capital structure decisions. You should continue to research Babcock & Wilcox Enterprises to get a more holistic view of the stock by looking at:
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned.