Liabilities Breakdown
Current Liabilities
144.7 M
Long-Term Liabilities
| Total Liabilities | 169.83 Million | |
| Current Liabilities | 18.68 Million | |
| Long-Term Liabilities | 144.73 Million |
Will Local Bounti (USA Stocks:LOCL) debt increase in September
 | By Vlad Skutelnik | Macroaxis Story |
Local Bounti Corp (USA Stocks: LOCL), a player in the Farm Products industry, is currently in a significant debt position. As of September, the company has a long-term debt of 119.8M, which is a substantial figure considering its total assets of 278.7M. This debt has led to a net interest income loss of 16.7M, further impacting the company's financial health. However, the company's valuation market value stands at 5.14, while its real value is estimated at 10.45, indicating a potential for growth. Despite a net income loss from continuing operations of 111.1M, the company has seen an issuance of capital stock worth 23.3M, suggesting investor confidence. Moreover, the company has 4 strong buy recommendations from analysts, with an overall consensus of a strong buy. This, coupled with the highest estimated target price of 45.513, suggests a potential upswing in the future. However, the company's negative change in cash of 76.1M and total cash from operating activities loss of 48.8M highlight the need for effective cash management. With a careful approach to its debt management and leveraging its assets, Local Bounti Corp could potentially navigate its way to profitability. The forthcoming quarterly report for Local Bounti Corp is anticipated on August 9, 2023. The stock is currently experiencing above-average trading volumes. The stability of Local Bounti's Issuance Repayment of Debt Securities is notable, especially when compared to the previous year. The company's current value of Issuance Repayment of Debt Securities is estimated to be around 131.96 million.
Share-Based Compensation is projected to increase to approximately 42.3 million this year. However, the value of Earnings Before Tax is likely to decrease to around -114 million. Given the growing investor interest in the food products sector, it is reasonable to consider Local Bounti Corp as a potential investment. As we move into September, it's important to assess whether Local Bounti shares are reasonably priced.
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Reviewed by Michael Smolkin
Local Bounti Corp currently has liabilities amounting to 120.08 million, with a Debt to Equity (D/E) ratio of 1.07. This ratio is roughly average when compared to similar companies. The company's current ratio stands at 2.2, indicating that it is sufficiently liquid and capable of meeting its financial obligations when they are due.
Debt can be beneficial for Local Bounti Corp until it encounters difficulties in paying it off, either with new capital or free cash flow. If the company fails to fulfill its legal obligations to repay its debt, Local Bounti's shareholders could potentially lose their entire investment. However, a more common scenario is for companies like Local Bounti Corp to issue additional shares at discounted prices, thereby diluting the value of existing shareholders' holdings.
In such a scenario, debt can be an excellent tool for Local Bounti to invest in high-return growth opportunities. When considering Local Bounti's use of debt, it's crucial to also take into account its cash and equity positions.
Rigorous look
Local Bounti Corp (LOCL) has a substantial net debt of 106.4M, which can be seen as a leveraged bet on the future of the company. Despite this high debt, the company has managed to increase its working capital by 5.4M, indicating a potential for improved liquidity and financial flexibility. However, the firm has reported an EBIT loss of 94.5M, which raises concerns about its ability to service its debt. Additionally, the firm's property, plant, and equipment net worth stands at 158M, which could potentially be used as collateral for future borrowing. Despite the risks associated with high leverage, the 15.77% price percent change indicates a potential upswing for LOCL, especially if the company can turn its operations around. Local Bounti financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Local Bounti, including all of Local Bounti's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Local Bounti assets, the company is considered highly leveraged. Understanding the composition and structure of overall Local Bounti debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Understanding Local Total Liabilities
Local Bounti Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Local Bounti Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Local Bounti balance sheet include debt obligations and money owed to different Local Bounti vendors, workers, and loan providers. Below is the chart of Local short long-term liabilities accounts currently reported on its balance sheet. You can use Local Bounti Corp financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Local Bounti's Liquidity
Local Bounti financial leverage refers to using borrowed capital as a funding source to finance Local Bounti Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Local Bounti financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Local Bounti's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Local Bounti's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Local Bounti's total debt and its cash.
Is Local Bounti valued adequately by the market?
The small slide in market price for the last few months may encourage institutional investors.to take a closer look at the firm as it is trading at a share price of 5.14 on 163,870 in trading volume. The company directors and management did not add much value to Local Bounti Corp investors in July. However, diversifying your holdings with Local Bounti or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 6.73. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Local Bounti Corp partners.
Local Bounti Corp (USA Stocks: LOCL), a player in the Consumer Defensive sector, is currently under the microscope due to its debt position. As of September, the company's total debt stands at a significant $120.08M, with long-term debt accounting for $119.8M of this figure. This debt is juxtaposed against a net asset value of $278.74M, indicating a substantial debt to asset ratio.The company's current ratio, a liquidity indicator, is at 2.24X, suggesting that LOCL has the ability to cover its short-term liabilities. However, the company's net income reflects a loss of $111.1M, with an operating income also in the red at $94.5M. This is a cause for concern, as it indicates the company's struggle to generate profits amidst its debt obligations. Furthermore, the company's free cash flow is at a negative $130.6M, implying that the company is spending more than it's making. Despite these figures, the company's shares are owned 21.37% by institutions and 53.16% by insiders, indicating a level of confidence in the company's future prospects. In conclusion, while Local Bounti Corp's debt position is substantial, its current ratio and insider ownership suggest potential for an upswing. However, the company's negative income and free cash flow figures should be closely monitored. The company's future performance will be crucial in determining whether it can effectively leverage its debt and deliver on its potential. .
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