ASX:CXO Historical Debt Feb 13th 18
More Can CXO pay its short-term liabilities? Since Core Exploration doesn’t have any debt on its balance sheet, it doesn’t have any solvency issues, which is a term used to describe the company’s ability to meet its long-term obligations. However, another measure of financial health is its short-term obligations, which is known as liquidity. These include payments to suppliers, employees and other stakeholders. With current liabilities at AU$858.59K, it seems that the business has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 7.56x. Though, a ratio greater than 3x may be considered as too high, as CXO could be holding too much capital in a low-return investment environment.
Next Steps: As a high-growth company, it may be beneficial for CXO to have some financial flexibility, hence zero-debt. Since there is also no concerns around CXO’s liquidity needs, this may be its optimal capital structure for the time being. In the future, its financial position may change. Keep in mind I haven’t considered other factors such as how CXO has been performing in the past. You should continue to research Core Exploration to get a more holistic view of the stock by looking at:
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.