Close Menu
The Elite TimesThe Elite Times
  • Home
  • Entrepreneur
  • Finance
  • Fund
  • Investment
  • Marketing
  • Stock
  • World
  • Business

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

What's Hot

Visionary Entrepreneur Manuel Manzoni and International Taxation Expert Marco Scardeoni Partner to Drive Global Expansion through GCC Advisors

April 16, 2024

Help comes to Fort Worth businesses affected by explosion – NBC 5 Dallas-Fort Worth

March 29, 2024

Lawmakers claim ‘irresponsible’ withdrawal from Endowment Fund proceeds to pay full dividends

March 29, 2024
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram
The Elite TimesThe Elite Times
  • Home
  • Entrepreneur

    21 Great Business Ideas for Nurse Entrepreneurs

    March 27, 2024

    EY announces 18 female entrepreneurs selected for EY Entrepreneurial Winning Women™ Asia-Pacific class of 2024 | EY

    March 27, 2024

    Victims of Baltimore bridge collapse include father of three and budding entrepreneur

    March 27, 2024

    Until April 2nd, get great discounts with lifetime access to this stock market app

    March 27, 2024

    Secure and reliable project management support for $25

    March 27, 2024
  • Finance

    Rocket Pharmaceuticals Announces Appointment of Aaron Ondrey as Chief Financial Officer and Additional Updates to Corporate Leadership Team

    March 26, 2024

    Reddit ignites resurgence in meme stocks, further sign of ‘bull market on all fronts’

    March 26, 2024

    Walmart stock plummets, retail giant expected to see further growth

    March 26, 2024

    Stocks soar as Wall Street looks to continue breaking records

    March 26, 2024

    Stocks soar as Wall Street looks to continue breaking records

    March 26, 2024
  • Fund

    Help comes to Fort Worth businesses affected by explosion – NBC 5 Dallas-Fort Worth

    March 29, 2024

    Lawmakers claim ‘irresponsible’ withdrawal from Endowment Fund proceeds to pay full dividends

    March 29, 2024

    The LDP slush fund scandal: What will make po

    March 29, 2024

    City of San Antonio seeks dismissal of Reproductive Justice Fund lawsuit

    March 29, 2024

    Clashes expected between Biden fundraisers and President Trump during preview visit to New York

    March 29, 2024
  • Investment

    Amazon (NASDAQ:AMZN) accelerates investment in humanity and accelerates AI drive

    March 28, 2024

    Recent trends in Kazakhstan’s investment situation

    March 28, 2024

    City of South Bend shares plans for Madison Lifestyle District with more than $330 million in private investment

    March 28, 2024

    OKX Ventures announces strategic investment in MyShell, a pioneer in AI-integrated Web3 technology

    March 28, 2024

    Reform of the EU Foreign Direct Investment Screening Regulation – How might M&A Transactions be impacted? | Mayer Brown

    March 28, 2024
  • Marketing

    Premium hospitality is on fire

    March 27, 2024

    S&P 500 sets record as Wall Street emerges from lull

    March 27, 2024

    DevvStream Announces Multi-Year Agreement to Sell CFR Credits with Major Logistics and Marketing Company

    March 27, 2024

    Global online dating services market by service (casual dating, matchmaking, niche dating), subscription (annual, monthly, quarterly), age group, and gender

    March 27, 2024

    Tower Federal Credit Union Receives Two CUNA Diamond Awards for Creative Excellence in Marketing

    March 27, 2024
  • Stock

    Forget Tesla: We think the ‘Magnificent Seven’ should replace this stock

    March 27, 2024

    Forget about Tesla: One of the unstoppable artificial intelligence (AI) stocks belongs to the ‘Magnificent Seven’ instead

    March 27, 2024

    2 Artificial Intelligence (AI) Stocks with Potential for Parabolic Growth

    March 27, 2024

    Mr. Powell’s comment

    March 27, 2024

    What you need to know about Trump Media’s stock debut

    March 27, 2024
  • World

    Take a look inside the New York Stock Exchange, the world’s largest stock market

    March 26, 2024

    China challenges Biden’s electric vehicle plan at World Trade Organization

    March 26, 2024

    Wolfspeed joins Senator Thom Tillis and key officials to conquer world’s largest and most advanced silicon carbide facility

    March 26, 2024

    Amy Brenneman, Raviv Ullman, Jeremy Love, cast and others in ‘Galilee’ world premiere, 34 years old

    March 26, 2024

    These beauty brands are among the most innovative companies in the world

    March 26, 2024
  • Business

    Canadian business leaders say housing should be a top federal budget priority

    March 27, 2024

    The power of mentorship in business

    March 27, 2024

    Los Angeles County business owner forced to pay damages after SWAT raid

    March 27, 2024

    Chinese President Xi meets with foreign business leaders amid economic uncertainty | Business and Economic News

    March 27, 2024

    China’s Xi Jinping meets with US business leaders in Beijing

    March 27, 2024
The Elite TimesThe Elite Times
Home»Investment»Here’s why Discount Investments (TLV:DISI) is weighed down by debt burden
Investment

Here’s why Discount Investments (TLV:DISI) is weighed down by debt burden

The Elite Times TeamBy The Elite Times TeamJanuary 2, 2024No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest WhatsApp Email

[ad_1]

Legendary fund manager Li Lu (backed by Charlie Munger) once said, “The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.” So when you think about the risk of a particular stock, it might be obvious that you need to consider debt. Because too much debt can sink a company. the important thing is, Discount Investment Corporation (TLV:DISI) has debt. But should shareholders be worried about its use of debt?

When is debt dangerous?

Debt is a tool to help businesses grow, but if a business is unable to repay its lenders, it is at their mercy. If the situation gets too bad, lenders may take control of your business. But a more common (but still expensive) situation is when a company needs to dilute shareholders at a cheap share price just to manage its debt. However, as an alternative to dilution, debt can be a very good tool for companies that need capital to invest in growth at high rates of return. The first step when considering a company’s debt levels is to consider its cash and debt together.

Check out our latest analysis on Discount Investing.

What is Discount Investment’s net debt?

As you can see below, Discount Investment’s debt was ₪17.3b at September 2023, down from ₪1.80b in the same period a year ago. However, since the company has cash of ₪2.88b, its net debt is less, at around ₪14.4b.

TASE:DISI Debt to Equity Transition January 2, 2024

How healthy is Discount Investment’s balance sheet?

According to its last reported balance sheet, Discount Investment had liabilities of ₪6.97b due within 12 months, and liabilities of ₪16.3b due beyond 12 months. . Offsetting this, it had cash of ¥2.88 billion and receivables due within 12 months of ¥1.14 billion. So it has liabilities of ₪19.3b more than its cash and short-term receivables, combined.

This deficit casts a shadow over the ₪546.7 million company like a colossus towering over mere mortals. So we definitely think shareholders need to monitor this closely. After all, if creditors demand repayment, Discount Investment will likely need a major recapitalization.

We look at net debt divided by earnings before interest, tax, depreciation and amortization (EBITDA) and calculate how easily a company’s earnings before interest, tax, depreciation and amortization (EBIT) cover interest. Measure your debt load. Expenses (interest burden). Therefore, we consider debt relative to earnings, with or without depreciation.

Weak interest cover of 1.7x and disturbingly high net debt to EBITDA ratio of 11.9 shattered our faith in discount investing like a one-two punch to the gut. This means that you are likely to be in a lot of debt. To make matters worse, Discount Investment’s EBIT was down 41% year over year. If earnings continue on this trajectory, paying down that debt will be harder than convincing someone to run a marathon in the rain. When analyzing debt levels, the balance sheet is the obvious place to start. But it’s the returns from discount investments that will influence how the balance sheet holds up in the future. So when considering debt, it’s worth keeping an eye on the earnings trend. Click here to view an interactive snapshot.

But final considerations are also important. This is because companies cannot pay their debts with paper profits. I need cold cash. So we always check how much of that EBIT is converted into free cash flow. Fortunately for shareholders, over the past three years Discount His Investments actually generated free cash flow that exceeded his EBIT. There’s nothing better than having cash coming in to stay in the good graces of lenders.

our view

On the surface, we’re hesitant about this stock given Discount Investment’s EBIT growth rate, and its total debt level is comparable to an empty restaurant on the busiest night of the year. It wasn’t that attractive. But at least it’s pretty decent at converting EBIT to free cash flow. That’s encouraging. It’s clear that we think discount investing is quite risky given the strength of our balance sheet. In short, we’re as wary of this stock as we are of a hungry kitten falling into its owner’s fish pond. As the saying goes, once bitten, twice shy. There’s no question that we learn most about debt from the balance sheet. Ultimately, however, any company can contain risks that exist outside the balance sheet. For example, we discovered that 1 warning sign for discount investing What you need to know before investing here.

If you’re interested in investing in a business that allows you to grow profits without taking on debt, check this out free A list of growing companies that have net cash on their balance sheet.

Valuation is complex, but we help make it simple.

Check out our comprehensive analysis to see if a discount investment is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.

See free analysis

Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

[ad_2]

Source link

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
Previous ArticlePower Finance Corporation stock price today’s live update: Power Finance Corporation stock price plummets amid market downturn
Next Article France, Germany to fund urban infrastructure project in India
The Elite Times Team
  • Website

Related Posts

Amazon (NASDAQ:AMZN) accelerates investment in humanity and accelerates AI drive

March 28, 2024

Recent trends in Kazakhstan’s investment situation

March 28, 2024

City of South Bend shares plans for Madison Lifestyle District with more than $330 million in private investment

March 28, 2024
Leave A Reply Cancel Reply

Demo
Latest Posts

21 Great Business Ideas for Nurse Entrepreneurs

March 27, 2024

EY announces 18 female entrepreneurs selected for EY Entrepreneurial Winning Women™ Asia-Pacific class of 2024 | EY

March 27, 2024

Victims of Baltimore bridge collapse include father of three and budding entrepreneur

March 27, 2024

Until April 2nd, get great discounts with lifetime access to this stock market app

March 27, 2024
Stay In Touch
  • Facebook
  • Twitter
  • Pinterest
  • Instagram
  • YouTube
  • Vimeo
Don't Miss

BYD aims to acquire major lithium company to expand EV battery business

By The Elite Times TeamJanuary 15, 2024

[ad_1] Leading Chinese EV maker BYD has entered into “active” talks with lithium producer Sigma…

Lawmakers announce agreement to expand child tax credit and business deduction

January 17, 2024

AI: A moment of transformation for business technology

January 18, 2024

Subscribe to Updates

Get the latest creative news from SmartMag about art & design.

Demo
About Us
About Us

Welcome to [Your Website Name], your go-to source for comprehensive information on funds, investments, and the latest in stock news. We are dedicated to providing you with accurate, insightful, and up-to-date content to empower your financial decisions.

Facebook X (Twitter) Pinterest YouTube WhatsApp
Our Picks

Visionary Entrepreneur Manuel Manzoni and International Taxation Expert Marco Scardeoni Partner to Drive Global Expansion through GCC Advisors

April 16, 2024

Help comes to Fort Worth businesses affected by explosion – NBC 5 Dallas-Fort Worth

March 29, 2024

Lawmakers claim ‘irresponsible’ withdrawal from Endowment Fund proceeds to pay full dividends

March 29, 2024
Most Popular

Visionary Entrepreneur Manuel Manzoni and International Taxation Expert Marco Scardeoni Partner to Drive Global Expansion through GCC Advisors

April 16, 2024

Teenage Girl Finds Mom’s Debit Card, Spends $64,000 on Mobile Games

January 9, 2020

Apple’s Beats Studio Pro Headphones Listed in FCC Database Ahead of Launch

January 10, 2020
© 2025 theelitetimes. Designed by theelitetimes.
  • Home
  • About us
  • Contact us
  • DMCA
  • Privacy Policy

Type above and press Enter to search. Press Esc to cancel.