Is CAQ Holdings (ASX:CAQ) Taking on Debt in a Risky Manner?

2 min read | March 21, 2025 01:30 PM AEDT | By Team Kalkine Media

Is CAQ Holdings (ASX:CAQ) Taking on Debt in a Risky Manner? — Image source: Shutterstock

A Deep Dive Into CAQ Holdings' Debt

Renowned investor Howard Marks aptly noted the stress of permanent loss overshadows short-term price volatility. This perspective underlines the critical significance of debt in evaluating a company's risk profile. For CAQ Holdings Limited (ASX:CAQ), debt plays a pivotal role in its financial landscape.

Evaluating the Financial Health of CAQ Holdings

As of December 2024, CAQ Holdings recorded a debt increase to AU$3.80 million from AU$3.43 million the previous year. However, with cash reserves of AU$88.0k, the net debt stands at approximately AU$3.72 million.

Balance Sheet Analysis

Current liabilities for CAQ Holdings are AU$4.45 million due within 12 months and AU$5.03 million due beyond that period. Offsetting these debts, the company holds AU$88.0k in cash and AU$132.0k in receivables due within the year. This results in liabilities exceeding the combined cash and receivables by AU$9.26 million.

Revenue and Earnings Insights

Over the past year, CAQ Holdings reported a revenue drop of 34% to AU$1.7 million, alongside an EBIT loss of AU$436k. This decline in earnings and revenue presents a challenge, especially given the negative free cash flow of AU$481k observed over the year.

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