Leggett & Platt (NYSE:LEG) Takes On Some Risk With Its Use Of Debt
Leggett & Platt (NYSE:LEG) Takes On Some Risk With Its Use Of Debt
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We note that Leggett & Platt, Incorporated (NYSE:LEG) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.
霍華德·馬克斯提到得很好,他說,與其擔心股價波動,不如關注「永久損失的可能性才是我擔心的風險……每個我認識的實際投資者也都在擔心這個。」 在評估一家公司的風險時,自然會考慮其資產負債表,因爲企業倒閉時往往涉及債務。我們注意到禮恩派公司(紐交所:LEG)確實在其資產負債表上有債務。但真正的問題是,這些債務是否使公司變得有風險。
When Is Debt Dangerous?
債務何時會變得危險?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.
當一個企業無法輕鬆履行債務義務時,債務和其他負債就會變得危險,無論是通過自由現金流,還是通過以有吸引力的價格籌集資金。最終,如果公司無法履行償還債務的法律義務,股東可能會一無所獲。 然而,更常見(但仍然代價高昂)的情況是,公司必須以極低的價格發行股份,永久性地稀釋股東權益,僅僅是爲了鞏固其資產負債表。 儘管如此,最常見的情況是公司合理地管理其債務,並使其受益。 當我們檢視債務水平時,我們首先會同時考慮現金和債務水平。
What Is Leggett & Platt's Net Debt?
禮恩派公司的淨債務是多少?
The image below, which you can click on for greater detail, shows that Leggett & Platt had debt of US$1.88b at the end of September 2024, a reduction from US$1.97b over a year. However, because it has a cash reserve of US$277.2m, its net debt is less, at about US$1.60b.
下面的圖像可以點擊以獲取更詳細信息,顯示到2024年9月底,禮恩派公司的債務爲18.8億美元,比一年前的19.7億美元有所下降。然而,由於其擁有27720萬美元的現金儲備,因此其淨債務更少,約爲16億美元。
How Healthy Is Leggett & Platt's Balance Sheet?
禮恩派的資產負債表健康狀況如何?
We can see from the most recent balance sheet that Leggett & Platt had liabilities of US$1.17b falling due within a year, and liabilities of US$1.87b due beyond that. On the other hand, it had cash of US$277.2m and US$638.1m worth of receivables due within a year. So its liabilities total US$2.12b more than the combination of its cash and short-term receivables.
我們可以從最新的資產負債表看到,禮恩派有119億美金的負債在一年內到期,並且有18.7億美金的負債在更長時間到期。另一方面,它的現金爲27720萬美金,且有63810萬美金的應收賬款在一年內到期。因此,它的負債總額比其現金和短期應收款的總和多出21.2億美金。
When you consider that this deficiency exceeds the company's US$1.44b 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.
考慮到這一缺口超過了公司的14.4億美金的市值,您可能會傾向於仔細審核資產負債表。假設,如果公司被迫通過在當前股價下籌集資金來償還負債,將需要極大的稀釋。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.
爲了評估一家公司的債務與其收益的關係,我們計算其淨債務與息稅折舊攤銷前利潤(EBITDA)的比率,以及息稅前利潤(EBIT)與利息費用的比率(即利息覆蓋率)。通過這種方式,我們考慮了債務的絕對數量和所支付的利率。
Leggett & Platt has a debt to EBITDA ratio of 3.9 and its EBIT covered its interest expense 3.3 times. This suggests that while the debt levels are significant, we'd stop short of calling them problematic. Worse, Leggett & Platt's EBIT was down 25% over the last year. If earnings continue to follow that trajectory, paying off that debt load will be harder than convincing us to run a marathon in the rain. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Leggett & Platt can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
禮恩派的債務與EBITDA比例爲3.9,且其EBIT支出覆蓋利息費用3.3倍。這表明雖然債務水平相當高,但我們不會稱其爲問題。更糟糕的是,禮恩派的EBIT在過去一年下降了25%。如果收益繼續沿着這個軌跡發展,償還這筆債務的難度將比說服我們在雨中跑馬拉松還要大。顯然,在分析債務時,資產負債表是重點。但最終,業務的未來盈利能力將決定禮恩派是否能夠隨着時間的推移增強其資產負債表。因此,如果您關注未來,可以查看這份免費的報告,了解分析師的盈利預測。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. So it's worth checking how much of that EBIT is backed by free cash flow. Over the last three years, Leggett & Platt recorded free cash flow worth a fulsome 87% of its EBIT, which is stronger than we'd usually expect. That puts it in a very strong position to pay down debt.
最後,一家公司只能用冷硬現金償還債務,而不是會計利潤。因此,值得檢查一下那部分EBIT有多少是由自由現金流支持的。在過去三年中,禮恩派記錄的自由現金流佔其EBIT的比例達到了87%,這比我們通常的預期要強。這使其在償還債務方面處於非常有利的地位。
Our View
我們的觀點
To be frank both Leggett & Platt's level of total liabilities and its track record of (not) growing its EBIT make us rather uncomfortable with its debt levels. But on the bright side, its conversion of EBIT to free cash flow is a good sign, and makes us more optimistic. We're quite clear that we consider Leggett & Platt to be really rather risky, as a result of its balance sheet health. For this reason we're pretty cautious about the stock, and we think shareholders should keep a close eye on its liquidity. 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. For instance, we've identified 2 warning signs for Leggett & Platt (1 is significant) you should be aware of.
坦率地說,禮恩派的總負債水平以及其EBIT(息稅前利潤)增長的表現讓我們對其債務水平感到相當不安。 但從積極的一面來看,其EBIT轉化爲自由現金流的表現是個好兆頭,讓我們感到更加樂觀。 我們十分明確地認爲,禮恩派因其資產負債表的健康狀況而顯得相當風險。 基於這個原因,我們對這隻股票保持謹慎,我們認爲股東應該密切關注其流動性。 在分析債務時,資產負債表顯然是需要關注的重點。 但歸根結底,每家公司都有可能存在資產負債表外的風險。 例如,我們已識別出禮恩派的2個警告信號(其中1個非常重要),您應當留意。
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
無論最終結果如何,有時候更容易關注那些根本不需要債務的公司。讀者可以立即免費獲取一份淨債務爲零的成長股列表。
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這篇來自Simply Wall ST的文章是一般性的。我們根據歷史數據和分析師預測提供評論,採用無偏見的方法,我們的文章並不旨在提供財務建議。它不構成對任何股票的買入或賣出建議,也未考慮到您的目標或財務狀況。我們旨在爲您提供以基本數據驅動的長期分析。請注意,我們的分析可能未考慮最新的價格敏感公司公告或定性材料。Simply Wall ST在提到的任何股票中均沒有持倉。
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