We take an in-depth look at the financial statements to see the overall level of assets and liabilities, paying special attention to cash levels (the ability to pay short-term liabilities) and the amount of long-term debt held by the company. A lot of debt is not necessarily a bad thing, especially depending on the company’s business model. But what are agency ratings for its corporate bonds? And does the company generate enough cash to service its debt and pay any dividends?
Some companies (and industries as a whole) are very capital intensive, while others require little more than the basics of employees, equipment, and a novel idea to get up and running. Look at the debt-to-equity ratio to see how much positive equity the company has going for it; we compare this with the competitors to put the metric into better perspective.
We synthesize this information into a comprehensive financial statement report for our clients with clear benchmarks.