Target (NYSE:TGT) Has A Pretty Healthy Balance Sheet
Target (NYSE:TGT) Has A Pretty Healthy Balance Sheet
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 seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Target Corporation (NYSE:TGT) does carry debt. But should shareholders be worried about its use of debt?
一些人認爲,與債務相比,波動性是投資者思考風險的最佳方式,但禾倫·巴菲特曾經說過:「波動性與風險遠非同義詞。」因此,明智的投資者知道,債務——通常與破產有關——是評估一家公司風險的非常重要因素。重要的是,Target Corporation(紐交所代碼:TGT)確實有債務。但股東們應該擔心它的債務使用嗎?
When Is Debt A Problem?
什麼時候負債才是一個問題?
Generally speaking, debt only becomes a real problem when a company can't 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 frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.
一般來說,債務只有在公司無法輕易地通過增加資本或利用自己的現金流償還時才會成爲一個真正的問題。在最糟糕的情況下,如果公司無法償還債權人的話,它可能會破產。然而,更普遍(但仍然代價高昂)的情況是公司必須以大打折扣的價格發行股票,從而永久性地稀釋股東的權益,以支撐其資產負債表。雖然債務可以替代股份稀釋,但債務與現金流結合在一起才是企業投資成長的一個極好工具。考慮一家公司的債務水平時,第一步是將其現金和債務放在一起考慮。
What Is Target's Net Debt?
Target的淨債務是多少?
As you can see below, Target had US$15.4b of debt at August 2024, down from US$16.2b a year prior. However, it does have US$3.50b in cash offsetting this, leading to net debt of about US$11.9b.
如下所示,Target在2024年8月的債務金額爲154億美元,比前一年的162億美元有所下降。然而,它有35億美元的現金抵消這一金額,從而導致淨債務約爲119億美元。
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How Strong Is Target's Balance Sheet?
Target的資產負債表有多強?
According to the last reported balance sheet, Target had liabilities of US$20.0b due within 12 months, and liabilities of US$21.6b due beyond 12 months. Offsetting this, it had US$3.50b in cash and US$1.40b in receivables that were due within 12 months. So it has liabilities totalling US$36.7b more than its cash and near-term receivables, combined.
根據最新公佈的資產負債表,Target在12個月內有200億美元的短期債務,12個月以上有216億美元的長期債務。與此相抵,它有35億美元的現金和14億美元的應收賬款,這些是在12個月內到期的。因此,它的負債總額比現金和短期應收賬款合計多367億美元。
While this might seem like a lot, it is not so bad since Target has a huge market capitalization of US$69.7b, and so it could probably strengthen its balance sheet by raising capital if it needed to. However, it is still worthwhile taking a close look at its ability to pay off debt.
雖然這看起來很多,但對於Target來說並不算糟糕,因爲它的市值高達697億美元,所以如果需要,它可能通過籌集資本來加強資產負債表。但是,仍然值得密切關注其償債能力。
We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (interest cover). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
我們通過查看淨債務與利息、稅、折舊和攤銷前收益(EBITDA)之比以及計算其利息支出由收益前利息和稅(EBIT)覆蓋的程度來度量一家公司的債務負載相對於其收益能力的程度。此方法的優點在於我們同時考慮了債務的絕對量(以淨債務爲EBITDA)以及與該債務相關的實際利息支出(以其利息覆蓋倍數計算)。
Target's net debt is only 1.3 times its EBITDA. And its EBIT easily covers its interest expense, being 14.7 times the size. So you could argue it is no more threatened by its debt than an elephant is by a mouse. In addition to that, we're happy to report that Target has boosted its EBIT by 31%, thus reducing the spectre of future debt repayments. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Target can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
Target的淨債務僅爲EBITDA的1.3倍。其EBIT輕鬆覆蓋利息費用,規模爲利息費用的14.7倍。所以你可以說,它受到債務威脅不比大象受到老鼠的威脅。此外,我們很高興地報告,Target的EBIT增長了31%,從而減少了未來債務償還的觸目成本。毫無疑問,我們從資產負債表中了解到最多關於債務的信息。但最終,業務的未來盈利能力將決定Target是否能夠隨着時間的推移加強其資產負債表。所以,如果你想知道專業人士的看法,你可能會對這份關於分析師盈利預測的免費報告感興趣。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow. Looking at the most recent three years, Target recorded free cash flow of 43% of its EBIT, which is weaker than we'd expect. That's not great, when it comes to paying down debt.
最後,雖然稅務人員可能喜歡會計利潤,但債權人只接受真金白銀的現金。因此,合乎邏輯的做法是看實際自由現金流與EBIT相匹配的比例。從最近三年來看,Target的自由現金流佔其EBIT的43%,這比我們預期的要弱。這在償還債務方面並不理想。
Our View
我們的觀點
Target's interest cover suggests it can handle its debt as easily as Cristiano Ronaldo could score a goal against an under 14's goalkeeper. But truth be told we feel its level of total liabilities does undermine this impression a bit. All these things considered, it appears that Target can comfortably handle its current debt levels. Of course, while this leverage can enhance returns on equity, it does bring more risk, so it's worth keeping an eye on this one. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 2 warning signs with Target , and understanding them should be part of your investment process.
Target的利息覆蓋表明它可以像Cristiano Ronaldo對付14歲以下守門員一樣輕鬆處理其債務。但事實上,我們認爲其總負債水平確實有點削弱了這種印象。考慮到所有這些因素,看起來Target可以輕鬆應對其目前的債務水平。當然,雖然這種槓桿可以增加股本回報,但它也帶來了更多的風險,所以值得關注。資產負債表顯然是分析債務時要關注的領域。但歸根結底,每家公司都可能存在資產負債表之外的風險。我們已經發現了Target的2個預警信號,了解它們應該是您投資過程的一部分。
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
如果您有興趣投資能夠在不負債的情況下增長利潤的企業,請查看這份免費列表,其中列出了在資產負債表上擁有淨現金的成長型企業。
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