While it does have liabilities worth noting, Blue Apron Holdings also has more cash than debt, so we're pretty confident it can manage its debt safely.
But it's clear that we should definitely closely examine whether it can manage its debt without dilution. This deficit isn't so bad because Blue Apron Holdings is worth US$220.1m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But on the other hand it also has US$51.0m in cash, leading to a US$20.4m net cash position. The image below, which you can click on for greater detail, shows that Blue Apron Holdings had debt of US$30.6m at the end of June 2021, a reduction from US$53.8m over a year. View our latest analysis for Blue Apron Holdings What Is Blue Apron Holdings's Net Debt? The first thing to do when considering how much debt a business uses is to look at its cash and debt together. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers.
Why Does Debt Bring Risk?ĭebt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. But the real question is whether this debt is making the company risky.
As with many other companies Blue Apron Holdings, Inc. The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company.
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