Yahoo Finance All You Need To Know About Fraser and Neave Limited’s (SGX:F99) Financial Health
Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as Fraser and Neave Limited (SGX:F99), with a market cap of S$2.81b, often get neglected by retail investors. While they are less talked about as an investment category, mid-cap risk-adjusted returns have generally been better than more commonly focused stocks that fall into the small- or large-cap categories. This article will examine F99’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Don’t forget that this is a general and concentrated examination of Fraser and Neave’s financial health, so you should conduct further analysis into F99 here. See our latest analysis for Fraser and Neave
How much cash does F99 generate through its operations?
Over the past year, F99 has ramped up its debt from S$137.05m to S$1.30b , which is made up of current and long term debt. With this increase in debt, the current cash and short-term investment levels stands at S$1.13b for investing into the business. On top of this, F99 has produced cash from operations of S$71.55m during the same period of time, resulting in an operating cash to total debt ratio of 5.49%, meaning that F99’s current level of operating cash is not high enough to cover debt. This ratio can also be interpreted as a measure of efficiency as an alternative to return on assets. In F99’s case, it is able to generate 0.055x cash from its debt capital.
Can F99 meet its short-term obligations with the cash in hand?
With current liabilities at S$1.19b, it seems that the business has been able to meet these obligations given the level of current assets of S$1.74b, with a current ratio of 1.46x. Generally, for Food companies, this is a reasonable ratio as there’s enough of a cash buffer without holding too capital in low return investments.
Can F99 service its debt comfortably?
With a debt-to-equity ratio of 37.18%, F99’s debt level may be seen as prudent. This range is considered safe as F99 is not taking on too much debt obligation, which can be restrictive and risky for equity-holders.
Next Steps:
Although F99’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings. This may indicate room for improvement in terms of its operating efficiency. However, the company exhibits an ability to meet its near term obligations should an adverse event occur. This is only a rough assessment of financial health, and I’m sure F99 has company-specific issues impacting its capital structure decisions. I suggest you continue to research Fraser and Neave to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for F99’s future growth? Take a look at our free research report of analyst consensus for F99’s outlook.
Valuation: What is F99 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether F99 is currently mispriced by the market.
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.
