Xoma版税（纳斯达克股票代码：Xoma）是否受到债务负担的影响？

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We can see that XOMA Royalty Corporation (NASDAQ:XOMA) does use debt in its business. But is this debt a concern to shareholders?

What Risk Does Debt Bring?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is XOMA Royalty's Net Debt?

As you can see below, at the end of March 2024, XOMA Royalty had US$120.7m of debt, up from none a year ago. Click the image for more detail. However, it does have US$136.6m in cash offsetting this, leading to net cash of US$16.0m.

A Look At XOMA Royalty's Liabilities

Zooming in on the latest balance sheet data, we can see that XOMA Royalty had liabilities of US$15.5m due within 12 months and liabilities of US$121.5m due beyond that. Offsetting these obligations, it had cash of US$136.6m as well as receivables valued at US$9.82m due within 12 months. So it actually has US$9.38m more liquid assets than total liabilities.

This short term liquidity is a sign that XOMA Royalty could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, XOMA Royalty boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine XOMA Royalty's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Over 12 months, XOMA Royalty reported revenue of US$5.8m, which is a gain of 73%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is XOMA Royalty?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And we do note that XOMA Royalty had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of US$13m and booked a US$45m accounting loss. But the saving grace is the US$16.0m on the balance sheet. That means it could keep spending at its current rate for more than two years. With very solid revenue growth in the last year, XOMA Royalty may be on a path to profitability. Pre-profit companies are often risky, but they can also offer great rewards. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 1 warning sign for XOMA Royalty that you should be aware of.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com