Choppies Enterprise Limited’s Financial Health

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Is Choppies Financially Healthy? A Breakdown of Its Latest Position

In this edition, we take a look at the financial health of Choppies Enterprises Limited based on the latest balance sheet visuals. Here’s what investors and stakeholders need to know:

Assets Overview

• Choppies holds total physical assets valued at P1.5 billion. These likely include retail infrastructure, logistics centers, and equipment.

• Inventory stands at P741 million, representing a large portion of current assets.

• Receivables are reported at P359 million, indicating the amount owed to the company from customers or partners.

• Cash and short-term investments are limited to P151 million, a relatively small portion of its asset base.

• Long-term and other assets total P196 million.

Liabilities and Equity Breakdown

• Accounts payable sit at P1.4 billion, suggesting significant outstanding payments to suppliers.

• Other liabilities are valued at P953 million.

• Long-term debt is P384 million, showing the company has some leverage but not excessive.

• Total equity is only P199 million, a small cushion relative to liabilities, indicating thin shareholder value.

Financial Position Analysis

• Short-term assets total P1 billion.

• Short-term liabilities are at P1.9 billion.

• This results in a shortfall in liquidity, meaning the company’s current assets are not enough to cover its short-term obligations.

• On the positive side, long-term assets stand at P2 billion, comfortably covering the company’s long-term liabilities of P837 million.

Key points to take away

• Choppies is strong on long-term asset coverage but shows weakness in short-term liquidity.

• The company could face challenges meeting short-term obligations without increasing cash reserves or improving receivables turnover.

• Equity is low, which might concern equity investors looking for long-term upside and protection.

• Operational efficiency, faster inventory turnover, and stronger cash flow generation will be critical going forward.

  Choppies remains a key player in the region’s retail landscape, but current financial metrics suggest the business needs to boost liquidity and manage its short-term debts more effectively.

Source: simplywallst