Good Times Story

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GTIM -- USA Stock  

USD 2.91  0.03  1.02%

The stock continues to experience an active upward rally. As many investors are getting excited about consumer cyclical space, it is fair to summarize Good Times Restaurants as an investment option. We will analyze why Good Times investors may still consider a stake in the business. Here we also measure the ability of Good Times to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over a month ago
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Should I hold on to my Good Times (NASDAQ:GTIM) position?
The company currently holds 75.56 M in liabilities with Debt to Equity (D/E) ratio of 5.04, indicating the firm may have difficulties to generate enough cash to satisfy its financial obligations. Good Times Restaurants has a current ratio of 0.71, indicating that it has a negative working capital and may not be able to pay financial obligations when due. About 26.0% of the company shares are held by company insiders. The book value of Good Times was currently reported as 1.09. Good Times Restaurants recorded a loss per share of 1.11. The entity had not issued any dividends in recent years. The firm had 1:3 split on the 31st of December 2010.
Good Times financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Good Times, including all of Good Times's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Good Times assets, the company is considered highly leveraged. Understanding the composition and structure of overall Good Times debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Good Times Total Liabilities

Good Times Restaurants liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Good Times Restaurants has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Good Times balance sheet include debt obligations and money owed to different Good Times vendors, workers, and loan providers. Below is the chart of Good Times short long-term liabilities accounts currently reported on its balance sheet.
You can use Good Times Restaurants financial leverage analysis tool to get a better grip on understanding its financial position

How important is Good Times's Liquidity

Good Times financial leverage refers to using borrowed capital as a funding source to finance Good Times Restaurants ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Good Times financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Good Times's total debt and its cash.

Breaking down Good Times Indicators

The entity reported the previous year's revenue of 109.86 M. Net Loss for the year was (13.92 M) with profit before overhead, payroll, taxes, and interest of 17.77 M.

Liabilities Breakdown

13.6 M
Current Liabilities
36.2 M
Long-Term Liabilities
Total Liabilities49.83 Million
Current Liabilities13.63 Million
Long-Term Liabilities36.2 Million

Our take on today Good Times hike

New variance is at 20.68. Good Times Restaurants shows above-average downside volatility for the selected time horizon. We advise investors to inspect Good Times Restaurants further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Good Times future alpha.

Our Final Take On Good Times

While other companies within the restaurants industry are still a little expensive, even after the recent corrections, Good Times may offer a potential longer-term growth to stakeholders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither trade nor exit any shares of Good Times at this time. The Good Times Restaurants risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Good Times.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Good Times Restaurants. Please refer to our Terms of Use for any information regarding our disclosure principles.

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