‘s debt levels surged from UK£133m to UK£204m over the last 12 months , which accounts for long term debt. With this rise in debt, the current cash and short-term investment levels stands at UK£16m , ready to be used for running the business. ’s current level of operating cash is high enough to cover debt. ’s UK£78m in current liabilities, it appears that the company has been able to meet these commitments with a current assets level of UK£106m, leading to a 1.35x current account ratio.
The current ratio is calculated by dividing current assets by current liabilities. is a highly-leveraged company with debt exceeding equity by over 100%. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. We can check to see whether VP.
is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax at least three times its net interest payments is considered financially sound. ’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. ‘s liquidity needs, this may be its optimal capital structure for the time being.
has company-specific issues impacting its capital structure decisions. 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. If you spot an error that warrants correction, please contact the editor at .
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