Replies to post #10815 on Aytu BioScience Inc. (AYTU)

[Aprice125]

AYTU DEBT. NOT BECAUSE COVID-19

The debt-to-equity ratio of 1.39 is relatively high when compared with the subsector average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, AYTU maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemical Manufacturing subsector and the overall market, AYTU BIOSCIENCE INC's return on equity significantly trails that of both the subsector average and the S&P 500.
Net operating cash flow has decreased to -$6.10 million or 41.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the subsector average, the firm's growth is significantly lower.
AYTU's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.28%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its subsector. But due to other concerns, we feel the stock is still not a good buy right now.
The gross profit margin for AYTU BIOSCIENCE INC is currently very high, coming in at 81.42%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.74% is in-line with the subsector average.


AYTU BIOSCIENCE INC's gross profit margin for the second quarter of its fiscal year 2020 has increased when compared to the same period a year ago. The company grew its sales and net income significantly quarter versus same quarter a year prior, and was able to outpace the average competitor in the subsector when comparing revenue growth, but not when comparing net income growth. AYTU BIOSCIENCE INC has weak liquidity. Currently, the Quick Ratio is 0.76 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 14.11% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.