These 4 Measures Indicate That Yinchuan Xinhua Commercial (Group) (SHSE:600785) Is Using Debt Extensively
These 4 Measures Indicate That Yinchuan Xinhua Commercial (Group) (SHSE:600785) Is Using Debt Extensively
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' 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. As with many other companies Yinchuan Xinhua Commercial (Group) Co., Ltd. (SHSE:600785) makes use of debt. But the real question is whether this debt is making the company risky.
傳奇基金經理李露（由查理·芒格支持）曾經說過：“最大的投資風險不是價格的波動，而是你是否會遭受永久的資本損失。”因此，當你評估公司的風險時，看來聰明的貨幣知道債務（通常涉及破產）是一個非常重要的因素。與許多其他公司一樣，銀川新華商業（集團）有限公司（上海證券交易所代碼：600785）也使用債務。但真正的問題是這筆債務是否使公司面臨風險。
Why Does Debt Bring Risk?
爲什麼債務會帶來風險？
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. 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 thing to do when considering how much debt a business uses is to look at its cash and debt together.
債務是幫助企業發展的工具，但是如果企業無法還清貸款人，那麼債務就任其擺佈。資本主義的一部分是 “創造性毀滅” 的過程，在這個過程中，倒閉的企業被銀行家無情地清算。但是，更常見（但仍然昂貴）的情況是，公司必須以低廉的股價稀釋股東才能控制債務。但是，通過取代稀釋，對於需要資金以高回報率投資增長的企業來說，債務可能是一個非常好的工具。在考慮企業使用多少債務時，要做的第一件事就是同時考慮其現金和債務。
What Is Yinchuan Xinhua Commercial (Group)'s Debt?
銀川新華商業（集團）的債務是多少？
The image below, which you can click on for greater detail, shows that Yinchuan Xinhua Commercial (Group) had debt of CN¥1.02b at the end of September 2023, a reduction from CN¥1.18b over a year. However, it does have CN¥547.9m in cash offsetting this, leading to net debt of about CN¥470.5m.
您可以點擊下圖查看更多詳情，該圖片顯示，銀川新華商業（集團）截至2023年9月底的債務爲10.2億元人民幣，較一年11.8億元人民幣有所減少。但是，它確實有5.479億元的現金抵消了這一點，淨負債約爲4.705億元人民幣。
How Healthy Is Yinchuan Xinhua Commercial (Group)'s Balance Sheet?
銀川新華商業（集團）的資產負債表有多健康？
The latest balance sheet data shows that Yinchuan Xinhua Commercial (Group) had liabilities of CN¥3.31b due within a year, and liabilities of CN¥2.69b falling due after that. Offsetting this, it had CN¥547.9m in cash and CN¥327.7m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥5.12b.
最新的資產負債表數據顯示，銀川新華商業（集團）的負債爲33.1億元人民幣，此後到期的負債爲26.9億元人民幣。與此相抵消的是，它有5.479億元的現金和3.277億元人民幣的應收賬款將在12個月內到期。因此，其負債超過其現金和（短期）應收賬款總額51.2億元人民幣。
When you consider that this deficiency exceeds the company's CN¥3.65b market capitalization, you might well be inclined to review the balance sheet intently. Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price.
當你考慮到這一缺口超過了公司36.5億元人民幣的市值時，你很可能會傾向於仔細審查資產負債表。假設，如果公司被迫通過按當前股價籌集資金來償還負債，則需要進行極其嚴重的稀釋。
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). Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.
我們通過以下方法來衡量公司的債務負擔與其盈利能力：將其淨負債除以利息、稅項、折舊和攤銷前的收益（EBITDA），並計算其利息和稅前收益（EBIT）支付利息支出（利息保障）的難易程度。因此，我們將債務與收益的關係考慮在內，包括和不包括折舊和攤銷費用。
Yinchuan Xinhua Commercial (Group) has a very low debt to EBITDA ratio of 1.2 so it is strange to see weak interest coverage, with last year's EBIT being only 1.8 times the interest expense. So while we're not necessarily alarmed we think that its debt is far from trivial. Yinchuan Xinhua Commercial (Group) grew its EBIT by 3.8% in the last year. That's far from incredible but it is a good thing, when it comes to paying off debt. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Yinchuan Xinhua Commercial (Group)'s ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
銀川新華商業（集團）的債務與息稅折舊攤銷前利潤的比率非常低，爲1.2，因此奇怪的是，利息覆蓋面薄弱，去年的息稅前利潤僅爲利息支出的1.8倍。因此，儘管我們不一定感到震驚，但我們認爲它的債務遠非微不足道。去年，銀川新華商業（集團）的息稅前利潤增長了3.8％。這遠非不可思議，但在還清債務方面，這是一件好事。資產負債表顯然是分析債務時需要關注的領域。但是，未來的收益將決定銀川新華商業（集團）未來維持健康資產負債表的能力。因此，如果您專注於未來，可以查看這份顯示分析師利潤預測的免費報告。
Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. Over the last three years, Yinchuan Xinhua Commercial (Group) actually produced more free cash flow than EBIT. That sort of strong cash generation warms our hearts like a puppy in a bumblebee suit.
最後，企業需要自由現金流來償還債務；會計利潤根本無法減少債務。因此，我們顯然需要研究息稅前利潤是否會帶來相應的自由現金流。在過去的三年中，銀川新華商業（集團）產生的自由現金流實際上超過了息稅前利潤。這種強勁的現金產生像穿着大黃蜂套裝的小狗一樣溫暖着我們的心。
Our View
我們的觀點
Neither Yinchuan Xinhua Commercial (Group)'s ability to cover its interest expense with its EBIT nor its level of total liabilities gave us confidence in its ability to take on more debt. But its conversion of EBIT to free cash flow tells a very different story, and suggests some resilience. When we consider all the factors discussed, it seems to us that Yinchuan Xinhua Commercial (Group) is taking some risks with its use of debt. While that debt can boost returns, we think the company has enough leverage now. Over time, share prices tend to follow earnings per share, so if you're interested in Yinchuan Xinhua Commercial (Group), you may well want to click here to check an interactive graph of its earnings per share history.
銀川新華商業（集團）用息稅前利潤支付利息支出的能力及其總負債水平都沒有使我們對它承擔更多債務的能力充滿信心。但是它將息稅前利潤轉換爲自由現金流卻講述了一個截然不同的故事，也表明了一定的彈性。當我們考慮所討論的所有因素時，在我們看來，銀川新華商業（集團）在使用債務方面正在冒一些風險。儘管這筆債務可以提高回報，但我們認爲該公司現在有足夠的槓桿作用。隨着時間的推移，股價往往會跟隨每股收益，因此，如果您對銀川新華商業（集團）感興趣，不妨點擊此處查看其每股收益歷史的互動圖表。
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
歸根結底，通常最好將注意力集中在沒有淨負債的公司身上。您可以訪問我們的此類公司的特別名單（所有公司都有利潤增長記錄）。它是免費的。
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