We can readily understand why investors are attracted to unprofitable companies. By way of example, Uranium Royalty ( CVE:URC ) has seen its share price rise 305% over the last year, delighting many shareholders. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given its strong share price performance, we think it’s worthwhile for Uranium Royalty shareholders to consider whether its cash burn is concerning. For the purpose of this article, we’ll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we’ll determine its cash runway by comparing its cash burn with its cash reserves. When Might Uranium Royalty Run Out Of Money?
A company’s cash runway is calculated by dividing its cash hoard by its cash burn. Uranium Royalty has such […]
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