DVR 0.00% $1.15 diverger limited

While, as a rule of thumb, current assets should normally exceed...

  1. 234 Posts.
    lightbulb Created with Sketch. 48
    While, as a rule of thumb, current assets should normally exceed current liabilities, I don't see any solvency issue in this case.
    The business has $2.5m in the bank and strong cashflows - far in excess of dividend payments - and no borrowings whatsoever.
    As noted in their 2021 annual report re "Liquidity Risk" (with similar quick ratio at that time):
    "To help mitigate these risks the Group attempts to ensure the entity has accessible liquidity in the form of cash and access to bank financing."
    Why use bank credit and pay interest just to make the accounting ratios prettier, when you can simply have a line of credit at the ready if needed?

    Given the ongoing earnings growth DVR seems like an absolute bargain to me at these prices.
    Last edited by StephenB: 01/08/22
 
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