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NETSOL is scheduled to announce its earnings today. NETSOL Free Cash Flow is decreasing as compared to previous years. The last year's value of Free Cash Flow was reported at 3.04 Million. The current Invested Capital is estimated to increase to about 47.3 M, while Market Capitalization is projected to decrease to under 72.4 M. As many of us are excited about technology space, it is fair to examine NETSOL as a unique alternative.
Published over three weeks ago
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What is October outlook for NETSOL (NASDAQ:NTWK)?
The company currently holds 11.88 M in liabilities with Debt to Equity (D/E) ratio of 0.19, which may suggest NETSOL is not taking enough advantage from borrowing. NETSOL has a current ratio of 2.53, suggesting that it is liquid enough and is able to pay its financial obligations when due.

Understanding NETSOL Total Liabilities

NETSOL liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. NETSOL 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 NETSOL balance sheet include debt obligations and money owed to different NETSOL vendors, workers, and loan providers. Below is the chart of NETSOL short long-term liabilities accounts currently reported on its balance sheet.
You can use NETSOL financial leverage analysis tool to get a better grip on understanding its financial position

How important is NETSOL's Liquidity

NETSOL financial leverage refers to using borrowed capital as a funding source to finance NETSOL ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. NETSOL 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 NETSOL's total debt and its cash.

A Deeper look at NETSOL

The modest gains experienced by current holders of NETSOL may encourage traders to take a closer look at the firm as it is trading at a share price of 2.88 on slow start in trading volume. The company directors and management have been quite successful in maneuvering the stock at opportune times to take advantage of all market conditions in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 2.75. The current volatility is consistent with the ongoing market swings in August 2020 as well as with NETSOL unsystematic, company-specific events.

Liabilities Breakdown

Total Liabilities17.92 Million
Current Liabilities22.48 Million
Long-Term Liabilities521,486

Will NETSOL recent surge continue?

Recent Market Risk Adjusted Performance is up to -0.04. Price may plunge again. NETSOL exhibits very low volatility with skewness of 0.42 and kurtosis of 0.84. However, we advise investors to further study NETSOL technical indicators to make sure all market info is available and is reliable.

Our Final Take On NETSOL

Although some firms within the software?application industry are still a little expensive, even after the recent corrections, NETSOL may offer a potential longer-term growth to traders. To conclude, as of the 28th of September 2020, our primary 30 days buy-hold-sell recommendation on the firm is Strong Hold. We believe NETSOL is undervalued with below average probability of distress for the next two years.

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 NETSOL. Please refer to our Terms of Use for any information regarding our disclosure principles.

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