Is Peregrine Diamonds Ltd (TSE:PGD) A Financially Sound Company?

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Is PGD’s debt level acceptable?

With debt at 1.08% of equity, PGD may be thought of as having low leverage. PGD is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. Risk around debt is extremely low for PGD, and the company also has the ability and headroom to increase debt if needed going forward.

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PGD’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 will be able to pay all of its upcoming liabilities from its current short-term assets. Keep in mind I haven’t considered other factors such as how PGD has been performing in the past. I recommend you continue to research Peregrine Diamonds to get a more holistic view of the stock by looking at:

• 1. Historical Performance: What has PGD’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.