Is Public Joint Stock Company United Aircraft Corporation (MCX:UNAC) A Financially Sound Company?

Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like Public Joint Stock Company United Aircraft Corporation (MISX:UNAC), with a market cap of RUРУБ280.63B, are often out of the spotlight. However, history shows that overlooked mid-cap companies have performed better on a risk-adjusted manner than the smaller and larger segment of the market. Let’s take a look at UNAC’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Don’t forget that this is a general and concentrated examination of Amazon’s financial health, so you should conduct further analysis into UNAC here. See our latest analysis for United Aircraft

Does UNAC generate enough cash through operations?

UNAC has built up its total debt levels in the last twelve months, from RUРУБ308.96B to RUРУБ381.61B – this includes both the current and long-term debt. With this increase in debt, the current cash and short-term investment levels stands at RUРУБ175.61B , ready to deploy into the business. Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn't be too useful, though these low levels of cash means that operational efficiency is worth a look. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can take a look at some of UNAC’s operating efficiency ratios such as ROA here.

Can UNAC meet its short-term obligations with the cash in hand?

With current liabilities at RUРУБ512.50B, it appears that the company has been able to meet these commitments with a current assets level of RUРУБ691.70B, leading to a 1.35x current account ratio. Generally, for Aerospace & Defense companies, this is a reasonable ratio since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.

Is UNAC’s debt level acceptable?

Since total debt levels have outpaced equities, UNAC is a highly leveraged company. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. But since UNAC is presently unprofitable, sustainability of its current state of operations becomes a concern. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.

Next Steps:

At its current level of cash flow coverage, UNAC has room for improvement to better cushion for events which may require debt repayment. Though, the company will be able to pay all of its upcoming liabilities from its current short-term assets. This is only a rough assessment of financial health, and I'm sure UNAC has company-specific issues impacting its capital structure decisions. I suggest you continue to research United Aircraft to get a more holistic view of the stock by looking at:

1. Historical Performance: What has UNAC'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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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.