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Keysight Technologies: Untold Risks of this NYSE Giant

Keysight Technologies: Untold Risks of this NYSE Giant

In our upcoming EcoReporter segment on ‘Is Keysight Technologies (NYSE:KEYS) A Risky Investment?’, we will be examining the company’s use of debt and whether it poses a risk to shareholders. Debt can become risky for a business when it cannot easily fulfill its obligations, which can lead to lenders taking control of the business or forcing the company to raise capital at distressed prices. However, debt can also be managed well and used to the company’s advantage.

Keysight Technologies had $1.79 billion in debt in July 2023, which is about the same as the previous year. However, the company also had $2.57 billion in cash, resulting in a net cash position of $778.0 million. While Keysight Technologies does have liabilities totaling $464.0 million more than its cash and near-term receivables combined, the company’s publicly traded shares are worth a total of $22.9 billion, making it unlikely that these liabilities would be a major threat.

Furthermore, Keysight Technologies has increased its earnings before interest and tax (EBIT) by 6.3% over the past twelve months, which should ease any concerns about debt repayment. Additionally, the company has generated free cash flow amounting to 86% of its EBIT over the last three years, putting it in a strong position to pay down debt.

Overall, while it is important to consider a company’s total liabilities, it is reassuring that Keysight Technologies has a net cash position and has been able to generate strong free cash flow. Therefore, we do not believe that the company’s use of debt poses a significant risk.

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Nayan Kumar