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How Financially Strong Is Cesca Therapeutics Inc (KOOL)?

Bryan Cramer

Cesca Therapeutics Inc (NASDAQ:KOOL) is a small-cap stock with a market capitalization of $29.99M. 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? Healthcare Equipment and Supplies companies, in particular ones that run negative earnings, are inclined towards being higher risk. Assessing first and foremost the financial health is vital. Here are few basic financial health checks you should consider before taking the plunge. Nevertheless, this commentary is still very high-level, so I’d encourage you to dig deeper yourself into KOOL here.

Does KOOL generate enough cash through operations?

KOOL’s debt levels surged from $2.5M to $3.5M over the last 12 months , which comprises of short- and long-term debt. With this increase in debt, KOOL’s cash and short-term investments stands at $3.6M , ready to deploy into the business. Though its operating cash flow is not yet significant enough to calculate a meaningful cash-to-debt ratio, indicating that operational efficiency is something we’d need to take a look at. 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 KOOL’s operating efficiency ratios such as ROA here.

Can KOOL meet its short-term obligations with the cash in hand?

With current liabilities at $4.5M liabilities, the company has been able to meet these commitments with a current assets level of $11.2M, leading to a 2.47x current account ratio. For healthcare equipment and supplies companies, this ratio is within a sensible range since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.

NasdaqCM:KOOL Historical Debt Dec 8th 17

Does KOOL face the risk of succumbing to its debt-load?

KOOL’s level of debt is appropriate relative to its total equity, at 16.22%. This range is considered safe as KOOL is not taking on too much debt obligation, which may be constraining for future growth. KOOL’s risk around capital structure is low, and the company has the headroom and ability to raise debt should it need to in the future.

Next Steps:

Are you a shareholder? KOOL’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise. Though, the company will be able to pay all of its upcoming liabilities from its current short-term assets. Given that its financial position may be different. You should always be researching market expectations for KOOL’s future growth on our free analysis platform.

Are you a potential investor? KOOL’s low-debt position gives it headroom for future growth funding in the future. Furthermore, its high liquidity means the company should continue to operate smoothly in the case of adverse events. To gain more conviction in the stock, you need to further analyse KOOL’s track record. I encourage you to continue your research by taking a look at KOOL’s past performance analysis on our free platform to figure out KOOL’s financial health position.


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.