HEXO Using debt SafelyTaken From Article: According to the last reported balance sheet, HEXO had liabilities of CA$58.0m due within 12 months, and liabilities of CA$79.7m due beyond 12 months. Offsetting these obligations, it had cash of CA$149.8m as well as receivables valued at CA$35.3m due within 12 months. So it actually has CA$47.3m more liquid assets than total liabilities.
This short term liquidity is a sign that HEXO could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, HEXO boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if HEXO can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
In the last year HEXO wasn't profitable at an EBIT level, but managed to grow its revenue by 70%, to CA$96m. Shareholders probably have their fingers crossed that it can grow its way to profits.
NOTE: HEXO has since reported EBITDA Positive (adjusted) on its most recent QTR report
Link to Full Article: https://simplywall.st/stocks/ca/pharmaceuticals-biotech/tsx-hexo/hexo-shares/news/hexo-tsehexo-is-using-debt-safely