RE:RE:RE:RE:capital allocation - mathI care about debt, I just think people are under-appreciating how much cash flow this company generates. The debt ratio at the end of 2019 was 2.1x, since then they made the Royal acquisition and have managed through two years of pandemic. But the debt ratio at the end of 2021 was only 1.1x. This company generates a lot of free cash!
As you may know, a revolving facility is designed to be drawn and repaid regularly to help a company manage its cash flows. With it, a company doesn't need to keep a big cash balance on its balance sheet. If they do an acquisition, they will certainly draw on the facility, and then pay it back down over time as they did after Royal. The company presentation says they target leverage under 2x, and since they are only at 1.1x now, they seem to have plenty of room to finance an acquisition.