Boreo Oyj, a tech company listed on the Helsinki Stock Exchange, has been evaluated for its investment risk. One important aspect to consider is the company's use of debt. While Boreo Oyj has reduced its debt from the previous year, it still has a significant amount of liabilities compared to its cash and near-term receivables. This raises concerns about potential dilution for shareholders if lenders demand a balance sheet improvement. However, Boreo Oyj has a manageable level of debt relative to its earnings, with a debt-to-EBITDA ratio of 2.9 and an EBIT cover ratio of 3.3. The company has also experienced significant growth in its EBIT over the past year, which could help in managing its debt load. Furthermore, Boreo Oyj has generated free cash flow that can be utilized to reduce its debt. While the company is currently managing its debt well, shareholders are advised to closely monitor the situation and consider all factors, including risks beyond the balance sheet, when assessing the investment potential of Boreo Oyj. [5d250e03]
This article discusses the debt management of Sunex, a company listed on the Warsaw Stock Exchange. It emphasizes the importance of assessing a company's debt when evaluating its risk. The article provides an overview of Sunex's debt and cash position, highlighting that while the company has a significant amount of debt, it also has cash to offset it. It mentions that Sunex could strengthen its balance sheet by raising capital if needed. The article also analyzes Sunex's debt relative to its earnings power, noting that the company's net debt is only 1.3 times its EBITDA and its EBIT covers its interest expense 103 times over. It mentions that Sunex's ability to cover its interest expense is impressive and that its growth in EBIT could make the debt more manageable in the future. However, the article cautions that Sunex burned a lot of cash in the last three years, which makes the debt more risky. It advises shareholders to keep a close watch on the company's debt levels. The article concludes by stating that while debt can enhance returns on equity, it's important to consider all the factors and not rely solely on the balance sheet. [ca569d08]