Yahoo Finance What Investors Should Know About Assure Holdings Corp’s (CVE:IOM) Financial Strength
Investors are always looking for growth in small-cap stocks like Assure Holdings Corp (CVE:IOM), with a market cap of CA$94.2m. However, an important fact which most ignore is: how financially healthy is the business? Healthcare companies, in particular ones that run negative earnings, are more likely to be higher risk. Assessing first and foremost the financial health is essential. Here are few basic financial health checks you should consider before taking the plunge. Nevertheless, I know these factors are very high-level, so I’d encourage you to dig deeper yourself into IOM here.
Does IOM produce enough cash relative to debt?
Over the past year, IOM has ramped up its debt from US$452.3k to US$1.1m made up of predominantly near term debt. With this increase in debt, IOM’s cash and short-term investments stands at US$318.9k , ready to deploy into the business. Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn’t be too useful, though these low levels of cash means that operational efficiency is worth a look. For this article’s sake, I won’t be looking at this today, but you can examine some of IOM’s operating efficiency ratios such as ROA here.
Can IOM meet its short-term obligations with the cash in hand?
At the current liabilities level of US$4.3m liabilities, it seems that the business has been able to meet these commitments with a current assets level of US$23.2m, leading to a 5.38x current account ratio. However, anything above 3x is considered high and could mean that IOM has too much idle capital in low-earning investments.
Is IOM’s debt level acceptable?
With a debt-to-equity ratio of 19.5%, IOM’s debt level may be seen as prudent. IOM is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. Investors’ risk associated with debt is very low with IOM, and the company has plenty of headroom and ability to raise debt should it need to in the future.
Next Steps:
Although IOM’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings. This may indicate room for improvement in terms of its operating efficiency. However, the company will be able to pay all of its upcoming liabilities from its current short-term assets. I admit this is a fairly basic analysis for IOM’s financial health. Other important fundamentals need to be considered alongside. I suggest you continue to research Assure Holdings to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for IOM’s future growth? Take a look at our free research report of analyst consensus for IOM’s outlook.
Historical Performance: What has IOM’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
