Priya patel
TLDR:
- Gorilla Technology Group (NASDAQ:GRRR) has a net cash position of $34.1m, offsetting its debt.
- The company’s balance sheet appears strong, with more liquid assets than total liabilities.
Legendary fund manager Li Lu once stated that the biggest investment risk is not price volatility but the potential for a permanent loss of capital. When assessing the risk of a stock, it’s crucial to consider the level of debt a company carries, as excessive debt can lead to significant financial troubles.
In the case of Gorilla Technology Group Inc. (NASDAQ:GRRR), the company had $25.4m of debt at the end of September 2023, while also holding $59.5m in cash, resulting in a net cash position of $34.1m. The balance sheet shows liabilities of $60.1m due within 12 months, but with $59.5m in cash, the company appears to have a solid financial foundation.
While the company did experience negative free cash flow in the last year, its ability to generate EBIT of $5.9m indicates a positive turnaround. Overall, Gorilla Technology Group’s debt use seems manageable, with a focus on maintaining a healthy balance sheet and future earnings growth.
Despite 5 warning signs flagged for the company, the net cash position and strong balance sheet indicate that the debt level of Gorilla Technology Group is not a major concern at this time.
