We're Interested To See How Tihama for Advertising Public Relations and Marketing (TADAWUL:4070) Uses Its Cash Hoard To Grow

Just because a business does not make any money, does not mean that the stock will go down. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

So, the natural question for Tihama for Advertising Public Relations and Marketing (TADAWUL:4070) shareholders is whether they should be concerned by its rate of cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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Does Tihama for Advertising Public Relations and Marketing Have A Long Cash Runway?

A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When Tihama for Advertising Public Relations and Marketing last reported its June 2025 balance sheet in August 2025, it had zero debt and cash worth ر.س190m. Looking at the last year, the company burnt through ر.س18m. So it had a very long cash runway of many years from June 2025. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. You can see how its cash balance has changed over time in the image below.

View our latest analysis for Tihama for Advertising Public Relations and Marketing

How Well Is Tihama for Advertising Public Relations and Marketing Growing?

Happily, Tihama for Advertising Public Relations and Marketing is travelling in the right direction when it comes to its cash burn, which is down 83% over the last year. But it was a bit disconcerting to see operating revenue down 4.1% in that time. It seems to be growing nicely. Of course, we've only taken a quick look at the stock's growth metrics, here. This graph of historic earnings and revenue shows how Tihama for Advertising Public Relations and Marketing is building its business over time.

How Hard Would It Be For Tihama for Advertising Public Relations and Marketing To Raise More Cash For Growth?

There's no doubt Tihama for Advertising Public Relations and Marketing seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Tihama for Advertising Public Relations and Marketing has a market capitalisation of ر.س629m and burnt through ر.س18m last year, which is 2.8% of the company's market value. So it could almost certainly just borrow a little to fund another year's growth, or else easily raise the cash by issuing a few shares.

Is Tihama for Advertising Public Relations and Marketing's Cash Burn A Worry?

It may already be apparent to you that we're relatively comfortable with the way Tihama for Advertising Public Relations and Marketing is burning through its cash. For example, we think its cash runway suggests that the company is on a good path. While its falling revenue wasn't great, the other factors mentioned in this article more than make up for weakness on that measure. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term. For us, it's always important to consider risks around cash burn rates. But investors should look at a whole range of factors when researching a new stock. For example, it could be interesting to see how much the Tihama for Advertising Public Relations and Marketing CEO receives in total remuneration.

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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 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. Simply Wall St has no position in any stocks mentioned.