Yahoo Finance What You Must Know About Schindler Holding AG’s (VTX:SCHN) Financial Health
Schindler Holding AG (VTX:SCHN), a large-cap worth CHF24.03b, comes to mind for investors seeking a strong and reliable stock investment. Most investors favour these big stocks due to their strong balance sheet and high market liquidity, meaning there are an adundance of stock in the public market available for trading. In times of low liquidity in the market, these firms won’t be left high and dry. They are also relatively unaffected by increases in interest rates. Today I will analyse the latest financial data for SCHN to determine is solvency and liquidity and whether the stock is a sound investment.
View our latest analysis for Schindler Holding
How does SCHN’s operating cash flow stack up against its debt?
In the previous 12 months, SCHN’s rose by about CHF697.00m – this includes both the current and long-term debt. With this increase in debt, SCHN currently has CHF2.15b remaining in cash and short-term investments , ready to deploy into the business. Additionally, SCHN has produced cash from operations of CHF803.00m in the last twelve months, leading to an operating cash to total debt ratio of 115.21%, signalling that SCHN’s operating cash is sufficient to cover its debt. This ratio can also be interpreted as a measure of efficiency as an alternative to return on assets. In SCHN’s case, it is able to generate 1.15x cash from its debt capital.
Can SCHN meet its short-term obligations with the cash in hand?
Looking at SCHN’s most recent CHF4.96b liabilities, it appears that the company has been able to meet these commitments with a current assets level of CHF6.31b, leading to a 1.27x current account ratio. Generally, for Machinery companies, this is a reasonable ratio since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.
Does SCHN face the risk of succumbing to its debt-load?
With a debt-to-equity ratio of 21.27%, SCHN’s debt level may be seen as prudent. This range is considered safe as SCHN is not taking on too much debt obligation, which can be restrictive and risky for equity-holders.
Next Steps:
SCHN has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at an appropriate level. Furthermore, the company exhibits an ability to meet its near-term obligations, which isn’t a big surprise for a large-cap. Keep in mind I haven’t considered other factors such as how SCHN has been performing in the past. You should continue to research Schindler Holding to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for SCHN’s future growth? Take a look at our free research report of analyst consensus for SCHN’s outlook.
Valuation: What is SCHN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SCHN is currently mispriced by the market.
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.