Even if a company is losing money, shareholders can profit if they purchase a good company at a reasonable price. Biotech and drawing out exploration companies, for example, frequently lose money for years before discovering a new treatment or mineral. Nonetheless, only a fool would overlook the danger of a losing company burning through cash too quickly.
Should shareholders of Qualigen Therapeutics NASDAQ: QLGN at https://www.webull.com/newslist/nasdaq-qlgn be concerned about its cash burn? We define cash burn in this article as a company’s yearly free cash flow, which is the amount of money it spends each year to account its development. We’ll start by comparing its cash burn to its cash reserves to determine its cash runway.
Is Qualigen Therapeutics a Company With a Long Cash Flow?
The cash runway of a company is determined by dividing its cash hoard by its cash burn. We’ll ignore Qualigen Therapeutics’ debt because it’s so small and instead focus on the US$24 million in cash it had at the end of December 2020. Its cash burn over the previous twelve months was US$14 million, which is significant. As of December 2020, it had a cash runway of around 21 months. That’s not bad, but unless cash burn is drastically reduced, the end of the cash runway is approaching. The graph below depicts the company’s cash balance over the last few years.
How is Qualigen Therapeutics doing in terms of growth?
One thing to keep in mind for shareholders is that Qualigen Therapeutics’ cash burn increased by 1,201 percent in the last year. While this is concerning in and of itself, operating revenue was down 30% over the same period makes us extremely concerned. In light of the preceding, we’re wary of the company’s current course. The most important factor is whether the company will be able to expand its operations in the future. As a result, you might want to look into how much the company is expected to grow in the coming years.
How Easy Is It For Qualigen Therapeutics To Raise Money?
Because Qualigen Therapeutics’ growth metrics haven’t improved yet, the market will be thinking about how it can raise more money if necessary. The most common ways for a publicly traded company to raise additional funds are issuing new shares or taking on debt. One of the most significant advantages of publicly traded companies is their ability to sell shares to investors to raise cash and fund expansion. There are also many other stocks like nyse f which you can check at https://www.webull.com/quote/nyse-f.