What does Red Rock Resources plc’s (LON:RRR) Balance Sheet Tell Us About Its Future?

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Does RRR face the risk of succumbing to its debt-load?

RRR’s level of debt is appropriate relative to its total equity, at 26.75%. This range is considered safe as RRR is not taking on too much debt obligation, which may be constraining for future growth. RRR’s risk around capital structure is low, and the company has the headroom and ability to raise debt should it need to in the future.

Next Steps:

Although RRR’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings. This may indicate room for improvement in terms of its operating efficiency. However, the company will be able to pay all of its upcoming liabilities from its current short-term assets. I admit this is a fairly basic analysis for RRR’s financial health. Other important fundamentals need to be considered alongside. You should continue to research Red Rock Resources to get a more holistic view of the stock by looking at:

• 1. Historical Performance: What has RRR’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.