Are Poseidon Nickel Limited’s (ASX:POS) Interest Costs Too High?

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

Since total debt levels have outpaced equities, POS is a highly leveraged company. This is not uncommon for a small-cap company given that debt tends to be lower-cost and at times, more accessible.

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POS’s high debt levels is not met with high cash flow coverage. This leaves room for improvement in terms of debt management and operational efficiency. In addition to this, its lack of liquidity raises questions over current asset management practices for the small-cap. I admit this is a fairly basic analysis for POS’s financial health. Other important fundamentals need to be considered alongside. You should continue to research Poseidon Nickel to get a more holistic view of the stock by looking at:

• 1. Historical Performance: What has POS’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.