Maxio Technology (Hangzhou) Co., Ltd. (SHSE:688449) has been analyzed for its debt levels and overall financial health. As David Iben wisely stated, the key concern is avoiding the permanent loss of capital rather than mere volatility. Debt can be a critical factor in evaluating the riskiness of a company, as it can lead to financial distress if not managed effectively.
In the case of Maxio Technology (Hangzhou), the company had CN¥153.6m in debt as of September 2024, with CN¥129.2m in cash, resulting in a net debt of CN¥24.3m. The balance sheet showed liabilities due within a year totaling CN¥355.5m, offset by CN¥129.2m in cash and CN¥307.5m in receivables due within 12 months. This suggests a solid balance sheet with liquid assets roughly matching total liabilities.
Maxio Technology (Hangzhou) demonstrated a low net debt to EBITDA ratio of 0.15 and strong EBIT coverage of interest expense at 69.1 times. The company also saw significant EBIT growth of 282% over twelve months, indicating potential for managing debt more effectively in the future.
While debt always carries risks, Maxio Technology (Hangzhou)’s reasonable use of debt and strong financial position provide confidence in its ability to handle indebtedness. Investors focused on the company’s future performance should keep an eye on earnings and cash flow to ensure ongoing financial stability. It’s essential to consider both debt levels and broader risks when evaluating investment opportunities.
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