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- G4S Limited Botswana, unprofitable business with a strong balance sheet
G4S Limited Botswana, unprofitable business with a strong balance sheet
This company has intrigued me for about 2 weeks
Boago Sephutho
November 27, 2025
Good morning, let’s get into it!
Now, following stock news, you’d know that two weeks ago, I posted that G4S Limited had reported losses, but when I looked deeper, I noticed something weird, so weird that it confused me. The company, although it has been in the red, actually has a strong balance sheet; let’s go way deep into this.
Fortress Balance Sheet
This is a financial term used to describe a company that has positioned itself to be virtually indestructible during hard times. Just like a physical fortress is built to survive a siege, a Fortress Balance Sheet is built to survive periods of losses, economic recessions, or operational mistakes without going bankrupt.
G4S Botswana fits this description perfectly because it has two distinct lines of defense:
1. The "Moat": Zero Debt
The most critical vulnerability for a loss-making company is interest payments. If you lose money and have to pay interest to a bank, you can quickly spiral into insolvency.
-G4S-EQO is debt-free.
The Defense: Because they have no loans, no bank can force them into bankruptcy for missing a payment. This "moat" protects them completely from credit risk.
2. The "Walls": Massive Liquidity
A fortress needs supplies to outlast the enemy. In finance, this is "Liquidity" (Current Assets)—cash and things that can be sold quickly to pay bills.
-The company has P104m in Short Term Assets versus only P55m in Short Term Liabilities.
The Defense: This is roughly a 2:1 ratio (Current Ratio). For every P1.00 of bills due soon, they have P2.00 available to pay them.
Summary
The company is "in the red" regarding profit (Income Statement), but it has a Fortress Balance Sheet because it has more than enough resources (P104m assets) to cover its obligations (P55m liabilities) and absolutely zero debt to drag it down. This is why it is considered "wealthy" despite losing money.
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