OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Credit Tracker By Industry Sector
Credit Tracker By Sector
Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.
Week ended 06/28/2024
Weekly Sector Credit
- Only 23 of the 43 companies in the Biotech/Pharma sector have significant revenue and only five of them have positive LTM funds from operations.
- The routinely negative cash flow from supporting drug discovery and clinical trials makes liquidity paramount. Unfortunately, the sector’s liquidity scores are critically low. The median free cash flow adjusted current ratio is only .1x, indicating significant liquidity stress and the imminent need for most companies to raise money. The third quartile value of 1.44x is more reassuring, indicating that at least 25 % of the 37 companies have sufficient liquidity to fund operations through the year.
- Most of the companies in the sector are quite small with median market caps of only $11M and total assets of $9M.
Week ended 06/28/2024
Weekly Sector Credit
- Only 23 of the 43 companies in the Biotech/Pharma sector have significant revenue and only five of them have positive LTM funds from operations.
- The routinely negative cash flow from supporting drug discovery and clinical trials makes liquidity paramount. Unfortunately, the sector’s liquidity scores are critically low. The median free cash flow adjusted current ratio is only .1x, indicating significant liquidity stress and the imminent need for most companies to raise money. The third quartile value of 1.44x is more reassuring, indicating that at least 25 % of the 37 companies have sufficient liquidity to fund operations through the year.
- Most of the companies in the sector are quite small with median market caps of only $11M and total assets of $9M.
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