Asana Inc (NASDAQ: ASAN) carries a total liability of
635.6M, which raises questions about its financial stability, especially given its recent loss of
17.9M in cash from operating activities. Investors should weigh these factors carefully, as the company's ability to manage debt could significantly impact its future growth and stock performance.
Main Points
Asana Inc. has $277.88 million in liabilities and a debt-to-equity ratio of 2.71, indicating a heavy reliance on borrowed funds to finance its operations. Our trading advice tool can help verify current analyst opinions on Asana and assess its growth potential in today’s economic climate. Notably, 42% of the company's shares are owned by insiders, suggesting a strong commitment from those within the company. However, Asana reported a loss of $1.17 per share and has not paid any dividends in recent years. Investors should weigh these factors carefully when considering Asana's stock.
Asana financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Asana, including all of Asana'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 Asana assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Asana 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 Asana Total Debt
Asana Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Asana Inc 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 Asana balance sheet include debt obligations and money owed to different Asana vendors, workers, and loan providers. Below is the chart of Asana main long-term debt accounts currently reported on its balance sheet.
You can use Asana Inc
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Asana's Liquidity
Asana
financial leverage refers to using borrowed capital as a funding source to finance Asana Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Asana 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 Asana'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 Asana'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 Asana's total debt and its cash.
Breaking down Asana Indicators
The company reported the previous year's revenue of 652.5
M. Net Loss for the year was (257.03
M) with profit before overhead, payroll, taxes, and interest of 458.84
M.
Asset Breakdown
229.4 M
Non Current Assets Total
483.9 M
Total Current Assets
Non Currrent Assets Other
430.6 M
Net Tangible Assets
| Total Assets | 713.26 Million |
| Net Tangible Assets | 430.56 Million |
| Non Current Assets Total | 229.36 Million |
| Non Currrent Assets Other | 47.84 Million |
| Other Assets | 14.98 Million |
| Other Current Assets | 27.77 Million |
| Total Current Assets | 483.9 Million |
"Debt is the price you pay for the opportunities you miss." – James Altucher. Asana Inc (NASDAQ: ASAN) presents a mixed picture when it comes to debt management.
With total debt standing at $277.88 million and a current ratio of 1.15X, the company appears to maintain a reasonable buffer to cover its short-term liabilities of $367.2 million. However, the company reported a net income loss of $257 million, raising concerns about its ability to generate sustainable profits. Investors should also note that Asana's debt-to-equity ratio is relatively low at 2.71%, indicating that while the company is leveraging its debt, it is not excessively reliant on it compared to its equity base. Overall, while the current debt levels are manageable, ongoing losses may pose a risk to long-term financial stability..
Possible October come-back of Asana?
Asana Inc's recent Sortino Ratio has risen slightly to -0.01, indicating that the stock's risk-adjusted returns remain unappealing. With potential price declines ahead, investors may be hesitant to re-enter the market. However, one must wonder: could this be a quiet moment before a significant rebound in October? Asana's journey will be closely monitored as it faces these challenges. The stock exhibits above-average downside volatility, which can help investors strategize their market timing. By utilizing volatility indicators, traders can assess Asana's risk relative to broader market fluctuations during both rising and falling trends.
The increased volatility associated with bear markets can affect Asana's stock price and heighten investor anxiety, often prompting them to diversify their portfolios amid falling prices.Asana Inc. has recently seen a price surge, but investors should tread carefully. With an overall consensus rating of "Buy" from analysts, the stock's estimated target price stands at
22.08, while its current market value is significantly lower at
14.06. This discrepancy raises questions about the sustainability of the recent price increase. Additionally, the presence of 9 holds and 1 strong sell among analysts suggests that caution may be warranted. As the fiscal year ends in January, it will be crucial for investors to monitor Asana's performance closely to determine if the current hype can translate into long-term value..
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Asana Inc. Please refer to our
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