1. Did you know that about two-thirds (2/3) of Abu Qir’s assets at the end of the 2021/2022 fiscal year were liquid assets – an asset structure that is very similar to CIB and not a fertilizer company?
The numbers below are in billion EGP at the end of June 2022
Total assets = 22.4
Of which: liquid financial assets = 14.2 and divided into:
1. Cash and cash equivalents = 2.9
2. Treasury bills = 11.3
Liquid assets to total assets = 14.2/22.4 = 63%
3. When you see this massive amount of liquidity on the balance sheet of any company, you must ask why its there, and there are usually 3 main reasons;
- Pay off short-term debts or liabilities
- Paying cash dividends to shareholders and employees
- Financing expected investments
First, the company already has nearly EGP 2.6 billion in short-term liabilities from the tax authority.
In addition, the General Assembly approved the distribution of EGP 3 per share, equivalent to EGP 3.8 billion, and the board of directors proposed distributing EGP 1.4 billion to employees and members of the board of directors.
The sum of the above liabilities = EGP 7.8 billion, which means that the company has net liquidity = 14.2 – 7.8 = EGP 6.4 billion, or about EGP 5 per share.
In the financial analysis, this surplus is classified as (cash firepower), meaning that the company has the ability to finance expansion and growth if it finds a value-accretive opportunity for that.
This was not written by Thndr and this is not investment advice, you should do your own research before making investment decisions.
