Warren Buffett famously said, “Volatility is not synonymous with risk.”When I think about how risky a company is, I always like to look to the use of debt as too much debt can lead to bankruptcy. Clean Energy Fuels Co., Ltd. (NASDAQ:CLNE) has debt on its balance sheet. But is this liability a concern for shareholders?
when debt is dangerous
Debt helps a business until it struggles to pay it back with either new capital or free cash flow. But the more common (but still painful) scenario is that shareholders are permanently diluted as they have to raise new capital at a lower price. But by displacing dilution, debt can be a very good tool for companies that need capital to invest in growth at high rates of return. When we first consider cash and liabilities together.
Get the latest analysis on clean energy fuels.
How Much Debt Do Clean Energy Fuels Have?
You can click the chart below for historical figures, which show that Clean Energy Fuels was $32.4 million in debt in June 2022. A year ago he is down from US$38.3 million. However, he has $187.5 million in cash to offset this, giving him $155.1 million in net cash.
How healthy is the clean energy fuel balance sheet?
The latest balance sheet shows that Clean Energy Fuels has $126 million in debt, due within one year, and $78.7 million in debt payable after that time. Offsetting this was US$187.5 million in cash and US$90.4 million of his receivables due within 12 months.So you actually have $73.1 million more Current assets over total liabilities.
The surplus suggests that Clean Energy Fuels’ balance sheet is conservative and will probably be able to pay off its debt without much difficulty. Simply put, Clean Energy Fuels boasts net cash, so it’s safe to say it doesn’t have a lot of debt. Clearly, the balance sheet is the starting point when analyzing debt levels. However, future earnings will determine Clean Energy Fuels’ ability to maintain a healthy balance sheet above all else.So if you are focused on the future check this out freedom A report that shows an analyst’s profit forecast.
Clean Energy Fuels reported revenue of US$359 million over 12 months. This is an increase of 61%, but earnings before interest and tax are not reported. With any luck, the company will be on its way to profitability.
So how dangerous are clean energy fuels?
Clean Energy Fuels has suffered earnings before interest (EBIT) losses in the last 12 months, but generated positive free cash flow of US$17 million. So, taking it at face value and considering the net cash situation, we don’t think the stock is too expensive in the short term. Given that his revenue grew 61% last year, we think it’s quite possible the company is doing well. There’s no question that rapid topline growth could cure all sorts of ailments in stocks. Arguably, we learn the most about debt from the balance sheet. However, not all investment risks are within the balance sheet. It’s far from the balance sheet.For example, clean energy fuels include 1 warning sign I think you should know.
After all, if you’re interested in a fast-growing company with a solid balance sheet, check out our list of net cash growth stocks right away.
Do you have feedback on this article? What interests you? contact directly with us. Or send an email to our editorial team (at) Simplywallst.com.
This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Is not …
Discounted cash flow calculation for all stocks
Wall St simply does a detailed discounted cash flow calculation every 6 hours for every stock on the market. here. It’s free.