Liabilities Breakdown
Tax Liabilities
1.4 B
Current Liabilities
Long-Term Liabilities
| Total Liabilities | 1.6 Billion | |
| Current Liabilities | 1.38 Billion | |
| Long-Term Liabilities | 220.73 Million | |
| Tax Liabilities | 159 Million |
Should I hold on to my Smart (USA Stocks:EM) position?
 | By Aina Ster | Macroaxis Story |
The company, Smart Share Global, has reported total liabilities of 10.62 million, with a debt to equity ratio (D/E) of 0.05. This might suggest that Smart Share is not fully capitalizing on financial leverage. With a current ratio of 2.74, Smart Share Global demonstrates a strong position to meet its debt obligations on time. Debt can be beneficial for Smart Share, provided it doesn't encounter difficulties in paying it off, either through new capital or free cash flow. If the company fails to meet its legal obligations to repay its debt, Smart Share's shareholders could potentially lose everything. However, a more common scenario is when companies like Smart Share Global issue additional shares at discounted prices, thereby diluting the value for existing shareholders. In this context, debt can be an excellent tool for Smart Share to invest in growth with high rates of return. When considering Smart Share's use of debt, it should always be evaluated in conjunction with cash and equity.
Progressive assessment
Investing in Smart Share Global stock could be a strategic move, especially considering its robust begin period cash flow of 1.3B and total assets amounting to 4.3B. However, potential investors should be wary of the company's significant operating income loss of 621.2M and a net income loss of 711.2M. From a leverage viewpoint, the firm's non-current liabilities total of 223.5M is relatively manageable, given its total current assets of 3.3B. However, the downside variance of 21.84, coupled with a maximum drawdown of the same value, indicates a degree of risk in this investment.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Rifka Kats
As we approach the end of the third quarter, Smart Share Global, a prominent player in the Hotels, Restaurants & Leisure sector, is expected to present its financial performance for September. The company, listed on NASDAQ and having its fiscal year end in December, has been closely watched since its IPO on the 1st of April 2021. Despite a challenging period marked by a net income loss of $711.2M, the company has maintained a robust cash flow, starting the period with $1.3B and ending with $984.4M. The company's total revenue stands at $2.8B, with a net invested capital of $2.6B. However, the company's short-term debt is relatively low at $9.8M, and it holds $2.1B in short-term investments. Despite the loss, Smart Share Global's financial health is reflected in its total assets and liabilities and stockholders' equity, both valued at $4.3B. The company's financial performance in September will be a critical indicator of its ability to leverage its assets and manage its liabilities effectively. Smart Share Global is set to announce its earnings today, with the forthcoming quarterly report expected on September 14, 2023. The company's Tangible Assets Book Value per Share is currently very stable compared to the previous year. Last year, Smart Share reported a Tangible Assets Book Value per Share of 16.55. As of August 20, 2023, the Effect of Exchange Rate Changes on Cash is projected to increase to approximately 45.4 million, while Earnings Before Tax are likely to decrease to -612.5 million. As some investors are growing more interested in the hotels, restaurants, and leisure sector, it's important to review Smart Share Global in more detail to better assess its debt utilization. We will analyze why recent price movements in Smart Share suggest a potential rebound in September.Smart Share financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Smart Share, including all of Smart Share's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Smart Share assets, the company is considered highly leveraged. Understanding the composition and structure of overall Smart Share debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring Smart Share on a daily basis if you are holding a position in it. Smart Share is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Smart Share stock to be traded above the $1 level to remain listed. If Smart Share stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
Understanding Smart Total Liabilities
Smart Share Global liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Smart Share Global has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Smart Share balance sheet include debt obligations and money owed to different Smart Share vendors, workers, and loan providers. Below is the chart of Smart short long-term liabilities accounts currently reported on its balance sheet. You can use Smart Share Global financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Smart Share's Liquidity
Smart Share financial leverage refers to using borrowed capital as a funding source to finance Smart Share Global ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Smart Share financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Smart Share's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Smart Share's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Smart Share's total debt and its cash.
Breaking it down
The entity generated the yearly revenue of 2.84 B. Annual Net Loss to common stockholders was (711.24 M) with gross profit of 2.28 B.
Smart Share Global, a prominent player in the Personal Services industry, has been showing significant financial performance this September. With a market capitalization of 236.44M, the company's stock is currently trading on the NASDAQ. The company's current ratio stands at 2.80X, indicating a healthy financial position, and its Price to Book ratio is 0.74X, suggesting that the stock may be undervalued. Despite having a net income from continuing operations resulting in a loss of 711.2M, Smart Share Global's financial health is not entirely bleak. The company's total revenue is 2.8B, with a gross profit of 2.28B.This suggests a robust revenue model, despite the high cost of revenue at 556.9M. The company's end period cash flow is 984.4M, with a free cash flow of 265.3M, showcasing a strong liquidity position. However, a change in cash of -352.2M indicates a significant cash outflow. Despite this, the company's total assets stand at 4.3B, which, along with total stockholder equity of 2.6B, presents a sturdy balance sheet. In conclusion, while Smart Share Global's financial performance shows some areas of concern, its overall financial health and the undervalued status of its stock present potential investment opportunities. However, investors should be mindful of the company's Beta of 0.3, indicating a lower volatility compared to the market, but also a potentially lower return. .
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Smart Share Global. Please refer to our Terms of Use for any information regarding our disclosure principles.