Twitter is one of the invaluable sources for news outlets and a medium to distribute instant information to regular users. This raises the company’s revenue to the next level as it jumped 25% to $108 million. This is incredible how Twitter’s business is growing, but this is one side of Twitter, another side from which investors are not aware of is its big debts.
Investors catching a robust stock investment which can often lead to Twitter. A big-cap worth US$29b – doing business worldwide, big-caps likely to have numerous revenue options and attractive assets returns. Meanwhile, the element of expanding achievement is in the strong financial state of the big-cap companies. The blog will show Twitter’s financial flexibility and debt levels to get an idea, whether Twitter can deal with the instant downturn and maintain funds to manage to spend for future growth and success. The article is all about the financial state of the company, so for the high-level overview and deep research, I recommend you to look further https://simplywall.st/stocks/us/media/nyse-twtr/twitter/news/what-investors-should-know-about-twitter-inc-s-nysetwtr-financial-strength-2/.
TWTR’s Debt/Cash Flows
TWTR’s debt in the last twelve month has increased from US$1.8b to US$3.5b, which include long-term debt. With this growth in debt, TWTR’s cash and short-term investments are around US$6.5b. Above all this, TWTR has to build US$1.4b in operating cash flow over the same time period which is resulting in operating cash to total debt of 42%, demonstrating that TWTR’s operating cash is sufficient to cover its debt.
TWTR Short Term Liabilities:
Twitter’s existing liabilities level is US$1.6b, it appears that the company can meet pledge with a current assets level of US$7.3b which is leading to a 4.47x current account ratio.
TWTR’s Debt Level Is Acceptable?
TWTR can be measured as an above-average company. With a debt-to-equality ratio of 49%, it is not shocking for big-caps, as equality can often be exclusive to issue than debt. Also, interest payments are tax deductible. Big-caps often have a lower cost of capital due to easy earning, proving an advantage over similar companies. By measuring TWTR earnings, it can estimate that its level of debt could be maintained at a certain rate of level or not. Big-caps investments like TWTR are often considered to be a safe investment because of their capability to produce sufficient income.