Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that Volatility is far from synonymous with risk. So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies Apex Biotechnology Corp. (TPE:1733) makes use of debt. But should shareholders be worried about its use of debt?
Generally speaking, debt only becomes a real problem when a company cant easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Having said that, the most common situation is where a company manages its debt reasonably well and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
View our latest analysis for Apex Biotechnology
The chart below, which you can click on for greater detail, shows that Apex Biotechnology had NT$408.7m in debt in September 2019; about the same as the year before. But on the other hand it also has NT$482.4m in cash, leading to a NT$73.8m net cash position.
Zooming in on the latest balance sheet data, we can see that Apex Biotechnology had liabilities of NT$532.6m due within 12 months and liabilities of NT$515.4m due beyond that. Offsetting these obligations, it had cash of NT$482.4m as well as receivables valued at NT$430.3m due within 12 months. So it has liabilities totalling NT$135.2m more than its cash and near-term receivables, combined.
Given Apex Biotechnology has a market capitalization of NT$2.83b, its hard to believe these liabilities pose much threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time. While it does have liabilities worth noting, Apex Biotechnology also has more cash than debt, so were pretty confident it can manage its debt safely.
It is just as well that Apex Biotechnologys load is not too heavy, because its EBIT was down 55% over the last year. Falling earnings (if the trend continues) could eventually make even modest debt quite risky. Theres no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet far from it. For example, weve discovered 2 warning signs for Apex Biotechnology which any shareholder or potential investor should be aware of.
Finally, a company can only pay off debt with cold hard cash, not accounting profits. While Apex Biotechnology has net cash on its balance sheet, its still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. During the last three years, Apex Biotechnology produced sturdy free cash flow equating to 59% of its EBIT, about what wed expect. This cold hard cash means it can reduce its debt when it wants to.
While it is always sensible to look at a companys total liabilities, it is very reassuring that Apex Biotechnology has NT$73.8m in net cash. So we are not troubled with Apex Biotechnologys debt use. While Apex Biotechnology didnt make a statutory profit in the last year, its positive EBIT suggests that profitability might not be far away. Click here to see if its earnings are heading in the right direction, over the medium term.
Of course, if youre the type of investor who prefers buying stocks without the burden of debt, then dont hesitate to discover our exclusive list of net cash growth stocks, today.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
See the original post here:
Does Apex Biotechnology (TPE:1733) Have A Healthy Balance Sheet? - Simply Wall St
- Production of ethanol from winter barley by the EDGE (enhanced dry grind enzymatic) process [Last Updated On: August 17th, 2024] [Originally Added On: April 29th, 2010]
- A high-throughput transient gene expression system for switchgrass (Panicum virgatum L.) seedlings [Last Updated On: August 17th, 2024] [Originally Added On: May 8th, 2010]
- Cellulose crystallinity index: measurement techniques and their impact on interpreting cellulase performance [Last Updated On: August 17th, 2024] [Originally Added On: May 25th, 2010]
- Comparing the fermentation performance of Escherichia coli KO11, Saccharomyces cerevisiae 424A(LNH-ST) and Zymomonas mobilis AX101 for cellulosic ethanol production [Last Updated On: August 17th, 2024] [Originally Added On: May 28th, 2010]
- Enzymatic digestibility and ethanol fermentability of AFEX-treated starch-rich lignocellulosics such as corn silage and whole corn plant [Last Updated On: August 17th, 2024] [Originally Added On: June 10th, 2010]
- Improved xylose and arabinose utilization by an industrial recombinant Saccharomyces cerevisiae strain using evolutionary engineering [Last Updated On: August 17th, 2024] [Originally Added On: June 16th, 2010]
- Effects of enzyme feeding strategy on ethanol yield in fed-batch simultaneous saccharification and fermentation of spruce at high dry matter [Last Updated On: August 17th, 2024] [Originally Added On: June 26th, 2010]
- Impact of dual temperature profile in dilute acid hydrolysis of spruce for ethanol production [Last Updated On: August 17th, 2024] [Originally Added On: July 2nd, 2010]
- Ethanol production from mixtures of wheat straw and wheat meal [Last Updated On: August 17th, 2024] [Originally Added On: July 6th, 2010]
- Earning Cash – Selling Old Mobile Phones [Last Updated On: August 17th, 2024] [Originally Added On: July 7th, 2010]
- Earning Cash – Selling Old Mobile Phones [Last Updated On: August 17th, 2024] [Originally Added On: July 7th, 2010]
- Improving simultaneous saccharification and co-fermentation of pretreated wheat straw using both enzyme and substrate feeding [Last Updated On: August 17th, 2024] [Originally Added On: August 3rd, 2010]
- Practical screening of purified cellobiohydrolases and endoglucanases with alpha-cellulose and specification of hydrodynamics [Last Updated On: August 17th, 2024] [Originally Added On: October 11th, 2010]
- Techno-economic evaluation of stillage treatment with anaerobic digestion in a softwood-to-ethanol process [Last Updated On: August 17th, 2024] [Originally Added On: October 11th, 2010]
- Cross-reactions between engineered xylose and galactose pathways in recombinant Saccharomyces cerevisiae [Last Updated On: August 17th, 2024] [Originally Added On: October 11th, 2010]
- Rapid optimization of enzyme mixtures for deconstruction of diverse pretreatment/biomass feedstock combinations [Last Updated On: August 17th, 2024] [Originally Added On: October 13th, 2010]
- Automated saccharification assay for determination of digestibility in plant materials [Last Updated On: August 17th, 2024] [Originally Added On: November 7th, 2010]
- Biodetoxification of toxins generated from lignocellulose pretreatment using a newly isolated fungus, Amorphotheca resinae ZN1, and the consequent ethanol fermentation [Last Updated On: August 17th, 2024] [Originally Added On: November 28th, 2010]
- Lignin monomer composition affects Arabidopsis cell-wall degradability after liquid hot water pretreatment [Last Updated On: August 17th, 2024] [Originally Added On: December 11th, 2010]
- Thermostable endoglucanases in the liquefaction of hydrothermally pretreated wheat straw [Last Updated On: August 17th, 2024] [Originally Added On: February 6th, 2011]
- Cellulose accessibility limits the effectiveness of minimum cellulase loading on the efficient hydrolysis of pretreated lignocellulosic substrates [Last Updated On: August 17th, 2024] [Originally Added On: February 14th, 2011]
- Arsenal of plant cell wall degrading enzymes reflects host preference among plant pathogenic fungi [Last Updated On: August 17th, 2024] [Originally Added On: February 16th, 2011]
- Hemicellulases and auxiliary enzymes for improved conversion of lignocellulosic biomass to monosaccharides [Last Updated On: August 17th, 2024] [Originally Added On: February 22nd, 2011]
- Two-step synthesis of fatty acid ethyl ester from soybean oil catalyzed by Yarrowia lipolytica lipase [Last Updated On: August 17th, 2024] [Originally Added On: March 6th, 2011]
- Topochemical distribution of lignin and hydroxycinnamic acids in sugar-cane cell walls and its correlation with the enzymatic hydrolysis of polysaccharides [Last Updated On: August 17th, 2024] [Originally Added On: March 17th, 2011]
- Direct ethanol production from cellulosic materials using a diploid strain of Saccharomyces cerevisiae with optimized cellulase expression [Last Updated On: August 17th, 2024] [Originally Added On: April 17th, 2011]
- Isolation of xylose isomerases by sequence- and function-based screening from a soil metagenome library [Last Updated On: August 17th, 2024] [Originally Added On: May 8th, 2011]
- Low temperature lignocellulose pretreatment: effects and interactions of pretreatment pH are critical for maximizing enzymatic monosaccharide yields from wheat straw [Last Updated On: August 17th, 2024] [Originally Added On: May 15th, 2011]
- Effect of mixing on enzymatic hydrolysis of steam-pretreated spruce: a quantitative analysis of conversion and power consumption [Last Updated On: August 17th, 2024] [Originally Added On: May 15th, 2011]
- Thermostable recombinant xylanases from Nonomuraea flexuosa and Thermoascus aurantiacus show distinct properties in the hydrolysis of xylans and pretreated wheat straw [Last Updated On: August 17th, 2024] [Originally Added On: May 22nd, 2011]
- Investigation of tension wood formation and 2,6-dichlorbenzonitrile application in short rotation coppice willow composition and enzymatic saccharification [Last Updated On: August 17th, 2024] [Originally Added On: May 29th, 2011]
- Aiming the complete utilization of sugar beet pulp through mild acid and hydrothermal pretreatment followed by enzymatic digestion [Last Updated On: August 17th, 2024] [Originally Added On: June 5th, 2011]
- Alkaline peroxide pretreatment of corn stover: effects of biomass, peroxide, and enzyme loading and composition on yields of glucose and xylose [Last Updated On: August 17th, 2024] [Originally Added On: June 12th, 2011]
- In-situ lignocellulosic unlocking mechanism in termite for carbohydrate hydrolysis: critical lignin modification [Last Updated On: August 17th, 2024] [Originally Added On: June 19th, 2011]
- Supplementation with xylanase and beta-xylosidase to reduce xylo-oligomer and xylan inhibition of enzymatic hydrolysis of cellulose and pretreated corn stover [Last Updated On: August 17th, 2024] [Originally Added On: June 26th, 2011]
- Co-hydrolysis of hydrothermal and dilute acid pretreated Populus slurries to support development of a high-throughput pretreatment system [Last Updated On: August 17th, 2024] [Originally Added On: July 17th, 2011]
- Evaluation of preservation methods for improving biogas production and enzymatic conversion yields of annual crops [Last Updated On: August 17th, 2024] [Originally Added On: July 24th, 2011]
- Simultaneous saccharification and co-fermentation of lignocellulosic residues from commercial furfural production and corn kernels using different nutrient media [Last Updated On: August 17th, 2024] [Originally Added On: July 31st, 2011]
- Increased isobutanol production in Saccharomyces cerevisiae by overexpression of genes in valine metabolism [Last Updated On: August 17th, 2024] [Originally Added On: July 31st, 2011]
- Bioprospecting metagenomics of decaying wood: mining for new glycoside hydrolases [Last Updated On: August 17th, 2024] [Originally Added On: August 7th, 2011]
- Functional characterization of cellulases identified from the cow rumen fungus neocallimastix patriciarum W5 by transcriptomic and secretomic analyses [Last Updated On: August 17th, 2024] [Originally Added On: August 21st, 2011]
- Simultaneous utilization of glucose and xylose for lipid production by Trichosporon cutaneum [Last Updated On: August 17th, 2024] [Originally Added On: August 28th, 2011]
- Conversion of deoxynivalenol to 3-acetyldeoxynivalenol in barley derived fuel ethanol co-products with yeast expressing trichothecene 3-O-acetyltransferases [Last Updated On: August 17th, 2024] [Originally Added On: September 4th, 2011]
- Comparative performance of precommercial cellulases hydrolyzing pretreated corn stover [Last Updated On: August 17th, 2024] [Originally Added On: September 11th, 2011]
- Impact of pretreatment and downstream processing technologies on economics and energy use in cellulosic ethanol production [Last Updated On: August 17th, 2024] [Originally Added On: September 11th, 2011]
- A kinetic model for quantitative evaluation of the effect of H2 and osmolarity on hydrogen production by Caldicellulosiruptor saccharolyticus [Last Updated On: August 17th, 2024] [Originally Added On: September 18th, 2011]
- High level secretion of cellobiohydrolases by Saccharomyces cerevisiae [Last Updated On: August 17th, 2024] [Originally Added On: September 18th, 2011]
- How recombinant swollenin from Kluyveromyces lactis affects cellulosic substrates and accelerates their hydrolysis [Last Updated On: August 17th, 2024] [Originally Added On: September 25th, 2011]
- Bio-conversion of paper sludge to biofuel by simultaneous saccharification and fermentation using a cellulase of paper sludge origin and thermotolerant Saccharomyces cerevisiae TJ14 [Last Updated On: August 17th, 2024] [Originally Added On: October 2nd, 2011]
- Biogenic hydrogen and methane production from Chlorella vulgaris and Dunaliella tertiolecta biomass [Last Updated On: August 17th, 2024] [Originally Added On: October 2nd, 2011]
- The enhancement of enzymatic hydrolysis of lignocellulosic substrates by the addition of accessory enzymes such as xylanase: is it an additive or synergistic effect? [Last Updated On: August 17th, 2024] [Originally Added On: October 9th, 2011]
- Biotechnology [Last Updated On: August 17th, 2024] [Originally Added On: October 10th, 2011]
- Biology: Biotechnology: Gene Cloning [Last Updated On: August 17th, 2024] [Originally Added On: October 10th, 2011]
- What Does a Biotechnology Course Look Like? [Last Updated On: August 17th, 2024] [Originally Added On: October 10th, 2011]
- Demo day by SCT Biotechnology Branch 2011 passouts [Last Updated On: August 17th, 2024] [Originally Added On: October 12th, 2011]
- Biotechnology Program Video [Last Updated On: August 17th, 2024] [Originally Added On: October 12th, 2011]
- Introduction To Industrial Biotechnology [Last Updated On: August 17th, 2024] [Originally Added On: October 13th, 2011]
- MSc Molecular Biotechnology -- Come to the School of Biosciences, University of Birmingham, UK - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 13th, 2011]
- Oxbridge Biotechnology Roundtable - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 15th, 2011]
- fermentation technology (biotechnology practical class) UNIVERSITY OF MALAYA - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 15th, 2011]
- Biotechnology: Learn about New Biological Medicines in Development - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 15th, 2011]
- Improving L-arabinose utilization of pentose fermenting Saccharomyces cerevisiae cells by heterologous expression of L-arabinose transporting sugar transporters [Last Updated On: August 17th, 2024] [Originally Added On: October 16th, 2011]
- The promoting effect of by-products from Irpex lacteus on subsequent enzymatic hydrolysis of bio-pretreated cornstalks [Last Updated On: August 17th, 2024] [Originally Added On: October 16th, 2011]
- Biotechnology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 16th, 2011]
- BiotechNaukri #Biotechnology Jobs - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 16th, 2011]
- bio-technology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 16th, 2011]
- BioBytes - Biotechnology and food flavoring - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 19th, 2011]
- Stine Biotechnology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 22nd, 2011]
- Effects of alkaline or liquid-ammonia treatment on crystalline cellulose: Changes in crystalline structure and effects on enzymatic digestibility [Last Updated On: August 17th, 2024] [Originally Added On: October 23rd, 2011]
- Transcriptome analysis of Aspergillus niger grown on sugarcane bagasse [Last Updated On: August 17th, 2024] [Originally Added On: October 23rd, 2011]
- A cellular automaton model of crystalline cellulose hydrolysis by cellulases [Last Updated On: August 17th, 2024] [Originally Added On: October 23rd, 2011]
- Application of a Burkholderia cepacia lipase-immobilized silica monolith to the batch and continuous biodiesel production with a stoichiometric mixture of methanol and crude Jatropha oil [Last Updated On: August 17th, 2024] [Originally Added On: October 23rd, 2011]
- Algal Biotechnology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 24th, 2011]
- Techniques of Biotechnology, Part 1 of 4 - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 25th, 2011]
- Biotechnology days in Macedonia II - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 26th, 2011]
- BioBytes: Forensics and Biotechnology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 26th, 2011]
- Faces of Biotechnology: What is Biotechnology - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 26th, 2011]
- Mucosal and systemic responses/Dr Thomas Muster-AVIR Green Hills Biotechnology-World Vaccine - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 26th, 2011]
- Unlimited Income Potential in Bio-Technology, Part 1 - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 27th, 2011]
- Islam Ahmadiyya Questions: Biotechnology, Portraits, Ring, Prayers, Dreams, Adopted Children - Video [Last Updated On: August 17th, 2024] [Originally Added On: October 28th, 2011]