The Aussie Broadband Ltd (ASX: ABB) has lifted in afternoon trade on Monday. At the time of writing, the share trades 3% higher at $3.10 apiece on no news.
As the growth/tech trade has unwound itself in 2022, investors have shifted priority onto fundamentals.
With that said, let's take a look at Aussie Broadband's financial position, and how this could be related to its share price.
Aussie Broadband balance sheet analysis
Turning to the company's balance sheet, we see it has a total asset base of $297 million as of H1 FY22. On this base, it has long-term liabilities of $29 million.
It also held more than $168 million in cash at H1 FY22, up from $57 million in the prior corresponding period (pcp).
Moreover, its debt ratio is just 10.5%, whereas debt as a percentage of Aussie's total capital is only 13% – suggesting the company is lowly leveraged.
It also covers its interest payment of more than 4 times from operating income, whilst generating $2.20 for every dollar invested into its asset base.
These seem to be supportive numbers for the Aussie Broadband share price.
Furthermore, the company looks as if it will meet its short-term obligations when they fall due. Short-term liabilities are covered more than 3 times from liquid assets, up from 1.5 times in the pcp.
As a result of its performance last half, it generated a 3.8% return on its assets and a 6% return on shareholder equity for the 6 months to December 2021.
Net-net, investors have $190 million in shareholder equity at the time of Aussie Broadband's last earnings report.
From this rudimentary analysis, it appears as if the company is reasonably well capitalised and will continue to meet its financial obligations as they fall due.
In the last 12 months, the Aussie Broadband share price has clipped an 11% gain.
