Is Red Mountain Mining Ltd’s (ASX:RMX) Balance Sheet A Threat To Its Future?

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Is RMX’s debt level acceptable?

With a debt-to-equity ratio of 1.22%, RMX’s debt level is relatively low. RMX is not taking on too much debt commitment, which may be constraining for future growth. Investors’ risk associated with debt is virtually non-existent with RMX, and the company has plenty of headroom and ability to raise debt should it need to in the future.

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RMX’s low debt is also met with low coverage. This indicates room for improvement as its cash flow covers less than a quarter of its borrowings, which means its operating efficiency could be better. However, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven’t considered other factors such as how RMX has been performing in the past. I recommend you continue to research Red Mountain Mining to get a more holistic view of the stock by looking at:

• 1. Historical Performance: What has RMX’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.