Explore Outdoor Holding’s Fair Values from the Community and select yours
Some state volatility, rather than debt, is the best way to consider about risk as an investor, but Warren Buffett famously stated that ‘Volatility is far from synonymous with risk.’ So it might be obvious that you necessary to consider debt, when you consider about how risky any given stock is, becaapply too much debt can sink a company. We note that Outdoor Holding Company (NASDAQ:POWW) does have debt on its balance sheet. But should shareholders be worried about its apply of debt?
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. While that is not too common, we often do see indebted companies permanently diluting shareholders becaapply lconcludeers force them to raise capital at a distressed price. Having stated that, the most common situation is where a company manages its debt reasonably well – and to its own advantage. When we consider about a company’s apply of debt, we first see at cash and debt toreceiveher.
What Is Outdoor Holding’s Debt?
You can click the graphic below for the historical numbers, but it displays that as of June 2025 Outdoor Holding had US$22.1m of debt, an increase on US$12.7m, over one year. However, its balance sheet displays it holds US$63.4m in cash, so it actually has US$41.3m net cash.
A Look At Outdoor Holding’s Liabilities
The latest balance sheet data displays that Outdoor Holding had liabilities of US$22.7m due within a year, and liabilities of US$24.2m falling due after that. Offsetting this, it had US$63.4m in cash and US$8.95m in receivables that were due within 12 months. So it actually has US$25.4m more liquid assets than total liabilities.
This surplus suggests that Outdoor Holding is utilizing debt in a way that is appears to be both safe and conservative. Becaapply it has plenty of assets, it is unlikely to have trouble with its lconcludeers. Succinctly put, Outdoor Holding boasts net cash, so it’s fair to state it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Outdoor Holding’s ability to maintain a healthy balance sheet going forward. So if you’re focapplyd on the future you can check out this free report displaying analyst profit forecasts.
See our latest analysis for Outdoor Holding
In the last year Outdoor Holding wasn’t profitable at an EBIT level, but managed to grow its revenue by 76%, to US$45m. With any luck the company will be able to grow its way to profitability.
So How Risky Is Outdoor Holding?
By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months Outdoor Holding lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through US$21m of cash and created a loss of US$62m. While this does build the company a bit risky, it’s important to remember it has net cash of US$41.3m. That kitty means the company can keep spconcludeing for growth for at least two years, at current rates. Outdoor Holding’s revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. Pre-profit companies are often risky, but they can also offer great rewards. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we’ve identified 1 warning sign for Outdoor Holding that you should be aware of.
If you’re interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
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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 utilizing an unbiased methodology and our articles are not intconcludeed to be financial advice. It does not constitute a recommconcludeation to acquire or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focapplyd 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.
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