NSEI:MIRCELECTR Debt to Equity History May 29th 2022 How Healthy Is MIRC Electronics' Balance Sheet?Īccording to the last reported balance sheet, MIRC Electronics had liabilities of ₹4.78b due within 12 months, and liabilities of ₹228.2m due beyond 12 months. However, it also had ₹177.8m in cash, and so its net debt is ₹499.2m. You can click the graphic below for the historical numbers, but it shows that MIRC Electronics had ₹677.0m of debt in March 2022, down from ₹853.5m, one year before. See our latest analysis for MIRC Electronics What Is MIRC Electronics's Net Debt? When we examine debt levels, we first consider both cash and debt levels, together.

Of course, debt can be an important tool in businesses, particularly capital heavy businesses. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders.

Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. But should shareholders be worried about its use of debt? When Is Debt Dangerous?ĭebt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price.

Importantly, MIRC Electronics Limited ( NSE:MIRCELECTR) does carry debt. 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.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin.

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