Small-caps and large-caps are wildly popular among investors, however, mid-cap stocks, such as Kazan Public Joint Stock Company Organichesky sintez (MISX:KZOS), with a market capitalization of RUРУБ149.95B, rarely draw their attention from the investing community. Surprisingly though, when accounted for risk, mid-caps have delivered better returns compared to the two other categories of stocks. Let’s take a look at KZOS’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself into KZOS here. See our latest analysis for Kazan Organichesky sintez

How does KZOS’s operating cash flow stack up against its debt?

KZOS has shrunken its total debt levels in the last twelve months, from RUРУБ12.41B to RUРУБ5.88B – this includes both the current and long-term debt. With this reduction in debt, KZOS’s cash and short-term investments stands at RUРУБ12.29B for investing into the business. Moreover, KZOS has produced cash from operations of RUРУБ12.14B over the same time period, leading to an operating cash to total debt ratio of 206.46%, indicating that KZOS’s operating cash is sufficient to cover its debt. This ratio can also be interpreted as a measure of efficiency as an alternative to return on assets. In KZOS’s case, it is able to generate 2.06x cash from its debt capital.

Can KZOS meet its short-term obligations with the cash in hand?

With current liabilities at RUРУБ10.17B, it appears that the company has been able to meet these commitments with a current assets level of RUРУБ26.13B, leading to a 2.57x current account ratio. For Chemicals companies, this ratio is within a sensible range since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.

Does KZOS face the risk of succumbing to its debt-load?

With debt at 12.03% of equity, KZOS may be thought of as appropriately levered. This range is considered safe as KZOS is not taking on too much debt obligation, which may be constraining for future growth.

Next Steps:

KZOS has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. In addition to this, the company will be able to pay all of its upcoming liabilities from its current short-term assets. I admit this is a fairly basic analysis for KZOS’s financial health. Other important fundamentals need to be considered alongside. You should continue to research Kazan Organichesky sintez to get a more holistic view of the stock by looking at: