Fisheries Management

Main Menu

  • Home
  • Trawling
  • Fishing Vessels
  • Fishing Industry
  • Traditional Fishing
  • Fishing Business

Fisheries Management

Header Banner

Fisheries Management

  • Home
  • Trawling
  • Fishing Vessels
  • Fishing Industry
  • Traditional Fishing
  • Fishing Business
Fishing Business
Home›Fishing Business›S2 Resources (ASX: S2R) is in a good position to achieve its growth plans

S2 Resources (ASX: S2R) is in a good position to achieve its growth plans

By Bridget Becker
March 19, 2021
0
0

Just because a business isn’t making money doesn’t mean the stock will go down. Indeed, S2 resources (ASX: S2R) the stock has risen 120% over the past year, delivering solid gains to shareholders. That said, unprofitable businesses are risky because they could potentially spend all of their money and end up in distress.

So, despite the strong share price, we believe it is worth considering whether S2 Resources’ cash consumption is too risky. In this report, we will consider the company’s annual negative free cash flow, which we now call “cash burn”. First, we will determine its cash trail by comparing its cash consumption with its cash reserves.

Check out our latest review for S2 resources

How long is S2 Resources’ cash flow track?

You can calculate a company’s cash flow trail by dividing the amount of cash it has by the rate at which it spends that cash. When S2 Resources last published its balance sheet in December 2020, it had no debt and cash worth AU $ 15 million. In the past year, its cash consumption was AU $ 4.6 million. So he had a cash flow trail of around 3.1 years as of December 2020. There is no doubt that this is a reassuringly long trail. Pictured below, you can see how his cash holdings have changed over time.

ASX: S2R History of debt to equity March 16, 2021

How does S2 Resources’ money consumption change over time?

Since S2 Resources does not currently generate any revenue, we consider it to be a start-up company. Nonetheless, we can still examine its cash consumption trajectory as part of our assessment of its cash consumption situation. While we’re not excited about it, the 26% year-over-year reduction in cash usage suggests the business can continue to operate for some time. S2 Resources is making us a little nervous due to its lack of substantial operating income. We prefer most stocks on that list of stocks that analysts expect to grow.

Can S2 resources easily raise more money?

Even though it recently reduced its cash consumption, shareholders should still consider how easy it would be for S2 Resources to raise more cash in the future. Generally speaking, a listed company can raise new liquidity by issuing shares or going into debt. One of the main advantages held by publicly traded companies is that they can sell stocks to investors to raise funds and finance growth. By comparing a company’s annual cash consumption to its total market capitalization, we can roughly estimate how many shares it would need to issue to keep the business running for another year (at the same burn rate).

As it has a market capitalization of AU $ 54 million, S2 Resources’ cash consumption of AU $ 4.6 million is equivalent to approximately 8.6% of its market value. Given that this is a rather small percentage, it would probably be very easy for the company to finance the growth of another year by issuing new shares to investors, or even taking out a loan.

So, should we be worried about S2 Resources’ cash consumption?

As you can probably see by now, we are not too worried about S2 Resources’ cash consumption. In particular, we believe that its cash flow track is proof that the company has good control over its spending. And while his reduction in cash consumption wasn’t as impressive, it was still positive. After taking into account the various measures mentioned in this report, we are quite comfortable with the way the company is spending its money, as it seems to be on track to meet its needs in the medium term. It is important for readers to be aware of the risks that can affect business operations, and we have selected 3 warning signs for S2 resources that investors need to know when investing in stocks.

Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of companies that insiders buy, and this list of growth stocks (according to analysts’ forecasts)

If you decide to trade S2 resources, use the cheapest platform * which is ranked # 1 overall by Barron’s, Interactive brokers. Trade stocks, options, futures, currencies, bonds and funds in 135 markets, all from one integrated account. Promoted

This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

Related posts:

  1. What credit score rating do you want for a bank card?
  2. ReCap Secured $ 50 Million Mortgage to Construct Floor Up Rental
  3. 11 Greatest Methods To Pay Off Pupil Loans • Benzinga
  4. US pandemic aid program mistakenly paid $ 692 million in duplicate loans: watchdog
Tagslong term

Recent Posts

  • Okinawan residents express concern after Chinese missiles fall near fishing spot
  • Cal Fire to remove stacked lumber sale logs from Chamberlain Creek – Fort Bragg Advocate-News
  • Explanation: what is ecocide? | News | Eco-Enterprise
  • US Navy vessel, not BHP, fishing gear damaged
  • Record amount of seaweed suffocates Caribbean shores

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021

Categories

  • Fishing Business
  • Fishing Industry
  • Fishing Vessels
  • Traditional Fishing
  • Trawling

Recent Posts

  • Okinawan residents express concern after Chinese missiles fall near fishing spot
  • Cal Fire to remove stacked lumber sale logs from Chamberlain Creek – Fort Bragg Advocate-News
  • Explanation: what is ecocide? | News | Eco-Enterprise
  • US Navy vessel, not BHP, fishing gear damaged
  • Record amount of seaweed suffocates Caribbean shores

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021

Categories

  • Fishing Business
  • Fishing Industry
  • Fishing Vessels
  • Traditional Fishing
  • Trawling
  • Terms and Conditions
  • Privacy Policy