Is BLVD Centers Corporation’s (CVE:CXV) Balance Sheet A Threat To Its Future?
BLVD Centers Corporation (TSXV:CXV) is a small-cap stock with a market capitalization of CA$19.77M. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Companies operating in the Healthcare industry, in particular ones that run negative earnings, tend to be high risk. Evaluating financial health as part of your investment thesis is crucial. I believe these basic checks tell most of the story you need to know. Though, I know these factors are very high-level, so I suggest you dig deeper yourself into CXV here.
How does CXV’s operating cash flow stack up against its debt?
CXV’s debt levels surged from CA$119.00K to CA$4.95M over the last 12 months , which is mainly comprised of near term debt. With this growth in debt, CXV currently has CA$8.98M remaining in cash and short-term investments for investing 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. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can assess some of CXV’s operating efficiency ratios such as ROA here.
Can CXV pay its short-term liabilities?
At the current liabilities level of CA$7.03M liabilities, it appears that the company has been able to meet these obligations given the level of current assets of CA$18.78M, with a current ratio of 2.67x. Usually, for Healthcare companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
Does CXV face the risk of succumbing to its debt-load?
With a debt-to-equity ratio of 13.06%, CXV’s debt level may be seen as prudent. CXV is not taking on too much debt commitment, which may be constraining for future growth. Investors’ risk associated with debt is very low with CXV, and the company has plenty of headroom and ability to raise debt should it need to in the future.
Next Steps:
CXV’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise. However, the company exhibits proper management of current assets and upcoming liabilities. This is only a rough assessment of financial health, and I’m sure CXV has company-specific issues impacting its capital structure decisions. I recommend you continue to research BLVD Centers to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Historical Performance: What has CXV’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 CXV’s historicals for more clarity.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.
To help readers see pass 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.
