Are Matsa Resources Limited’s (ASX:MAT) Interest Costs Too High?

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

With a debt-to-equity ratio of 16.81%, MAT’s debt level may be seen as prudent. This range is considered safe as MAT is not taking on too much debt obligation, which can be restrictive and risky for equity-holders. Risk around debt is very low for MAT, and the company also has the ability and headroom to increase debt if needed going forward.

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MAT’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 MAT has been performing in the past. I suggest you continue to research Matsa Resources to get a better picture of the stock by looking at:

• 1. Historical Performance: What has MAT’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.