![]() Simply Wall St has no position in any stocks mentioned. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. We aim to bring you long-term focused analysis driven by fundamental data. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. This article by Simply Wall St is general in nature. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying. Of course Fission Uranium may not be the best stock to buy. On another note, we conducted an in-depth investigation of the company, and identified 2 warning signs for Fission Uranium (1 is potentially serious!) that you should be aware of before investing here. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Fission Uranium's situation. So, Should We Worry About Fission Uranium's Cash Burn?Įven though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought Fission Uranium's cash burn relative to its market cap was relatively promising. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.įission Uranium has a market capitalisation of CA$518m and burnt through CA$24m last year, which is 4.7% of the company's market value. ![]() One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Given its cash burn trajectory, Fission Uranium shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. You can see how its cash balance has changed over time in the image below.Ĭan Fission Uranium Raise More Cash Easily? ![]() Importantly, if we extrapolate recent cash burn trends, the cash runway would be noticeably longer. That's not too bad, but it's fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. So it had a cash runway of approximately 18 months from June 2022. ![]() In the last year, its cash burn was CA$24m. When Fission Uranium last reported its balance sheet in June 2022, it had zero debt and cash worth CA$37m. View our latest analysis for Fission Uranium How Long Is Fission Uranium's Cash Runway?Ī company's cash runway is calculated by dividing its cash hoard by its cash burn. The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth its negative free cash flow. So, the natural question for Fission Uranium ( TSE:FCU) shareholders is whether they should be concerned by its rate of cash burn. But while history lauds those rare successes, those that fail are often forgotten who remembers ? For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Just because a business does not make any money, does not mean that the stock will go down. ![]()
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