What does CyBERG Corp. Kereskedelmi, Szolgáltató és Vendéglátó Nyilvánosan Muködo Részvénytársaság's (BUSE:CYBERG) Balance Sheet Tell Us About Its Future?

Investors are always looking for growth in small-cap stocks like CyBERG Corp. Kereskedelmi, Szolgáltató és Vendéglátó Nyilvánosan Muködo Részvénytársaság (BUSE:CYBERG), with a market cap of Ft4.8m. However, an important fact which most ignore is: how financially healthy is the business? Since CYBERG is loss-making right now, it’s essential to assess the current state of its operations and pathway to profitability. I believe these basic checks tell most of the story you need to know. However, since I only look at basic financial figures, I recommend you dig deeper yourself into CYBERG here.

How does CYBERG’s operating cash flow stack up against its debt?

Over the past year, CYBERG has ramped up its debt from Ft21m to Ft38m , which includes long-term debt. With this increase in debt, CYBERG currently has Ft9.7m remaining in cash and short-term investments for investing into the business. Moving onto cash from operations, its trivial cash flows from operations make the cash-to-debt ratio less useful to us, though these low levels of cash means that operational efficiency is worth a look. For this article’s sake, I won’t be looking at this today, but you can assess some of CYBERG’s operating efficiency ratios such as ROA here.

Can CYBERG pay its short-term liabilities?

Looking at CYBERG’s Ft53m in current liabilities, it seems that the business has been able to meet these commitments with a current assets level of Ft77m, leading to a 1.45x current account ratio. Usually, for General companies, this is a suitable ratio since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments.

Is CYBERG’s debt level acceptable?

With a debt-to-equity ratio of 27%, CYBERG's debt level may be seen as prudent. CYBERG is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. Investors' risk associated with debt is very low with CYBERG, and the company has plenty of headroom and ability to raise debt should it need to in the future.

Next Steps:

CYBERG’s high cash coverage and appropriate debt levels indicate its ability to utilise its borrowings efficiently in order to generate ample cash flow. Furthermore, the company exhibits proper management of current assets and upcoming liabilities. This is only a rough assessment of financial health, and I'm sure CYBERG has company-specific issues impacting its capital structure decisions. I suggest you continue to research CyBERG Kereskedelmi Szolgáltató és Vendéglátó Nyilvánosan Muködo Részvénytársaság to get a more holistic view of the stock by looking at:

1. Historical Performance: What has CYBERG's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. 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.

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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.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.