ASX:AWV Historical Debt Feb 13th 18
Can AWV pay its short-term liabilities?
Given zero long-term debt on its balance sheet, Anova Metals 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. At the current liabilities level of AU$364.04K liabilities, it seems that the business has been able to meet these commitments with a current assets level of AU$7.80M, leading to a 21.42x current account ratio. However, a ratio greater than 3x may be considered as too high, as AWV could be holding too much capital in a low-return investment environment.
Next Steps:
As a high-growth company, it may be beneficial for AWV to have some financial flexibility, hence zero-debt. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. Moving forward, its financial position may be different. Keep in mind I haven’t considered other factors such as how AWV has been performing in the past. You should continue to research Anova Metals to get a better picture 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.