Prosperity Resources (ASX:PSP) Debt-to-EBITDA : -1.70 (As of Jun. 2016)

What is Prosperity Resources Debt-to-EBITDA?

Prosperity Resources ASX:PSP Debt-to-EBITDA is -1.70 as of Jun. 2016. The stock has 4 warning signs investors should review.

Debt-to-EBITDA measures a company's ability to pay off its debt.

Prosperity Resources's Short-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2016 was A$0.91 Mil. Prosperity Resources's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2016 was A$0.00 Mil. Prosperity Resources's annualized EBITDA for the quarter that ended in Jun. 2016 was A$-0.53 Mil. Prosperity Resources's annualized Debt-to-EBITDA for the quarter that ended in Jun. 2016 was -1.69.

A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt. According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.

The historical rank and industry rank for Prosperity Resources's Debt-to-EBITDA or its related term are showing as below:

ASX:PSP's Debt-to-EBITDA is not ranked ^*
in the Metals & Mining industry.
Industry Median: 1.235
* Ranked among companies with meaningful Debt-to-EBITDA only.

Prosperity Resources (ASX:PSP) Debt-to-EBITDA Explanation

In the calculation of Debt-to-EBITDA, we use the total of Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation divided by EBITDA. In some calculations, Total Liabilities is used to for calculation.

Be Aware

A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt.

According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.

Prosperity Resources Debt-to-EBITDA Related Terms

Prosperity Resources Debt-to-EBITDA Historical Data

* Premium members only.

The historical data trend for Prosperity Resources's Debt-to-EBITDA can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Prosperity Resources Debt-to-EBITDA Chart

Prosperity Resources Annual Data

Trend

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Jun14

Jun15

Jun16

Debt-to-EBITDA

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-0.16

-0.14

-0.08

-1.14

-1.75

Prosperity Resources Semi-Annual Data
	Dec06	Jun07	Dec07	Jun08	Dec08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16
Debt-to-EBITDA	Get a 7-Day Free Trial															-0.05	-0.82	-1.57	-1.78	-1.70

Prosperity Resources Debt-to-EBITDA Competitor Comparison

For the Gold subindustry, Prosperity Resources's Debt-to-EBITDA, along with its competitors' market caps and Debt-to-EBITDA data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Prosperity Resources Debt-to-EBITDA vs Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Prosperity Resources's Debt-to-EBITDA distribution charts can be found below:

* The bar in red indicates where Prosperity Resources's Debt-to-EBITDA falls into.

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Prosperity Resources Debt-to-EBITDA Calculation

Debt-to-EBITDA measures a company's ability to pay off its debt.

Prosperity Resources's Debt-to-EBITDA for the fiscal year that ended in Jun. 2016 is calculated as

Debt-to-EBITDA	=	Total Debt			/	EBITDA
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	EBITDA
	=	(0.905	+	0)	/	-0.518
	=	-1.75

Prosperity Resources's annualized Debt-to-EBITDA for the quarter that ended in Jun. 2016 is calculated as

Debt-to-EBITDA	=	Total Debt			/	EBITDA
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	EBITDA
	=	(0.905	+	0)	/	-0.534
	=	-1.69

In the calculation of annual Debt-to-EBITDA, the EBITDA of the last fiscal year is used. In calculating the annualized quarterly data, the EBITDA data used here is two times the quarterly (Jun. 2016) EBITDA data.

Frequently Asked Questions Learn more about Debt-to-EBITDA →

What does a Debt-to-EBITDA of -1.70 mean?

Prosperity Resources (ASX:PSP) has a Debt-to-EBITDA of -1.70 as of Jun. 2016. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Prosperity Resources.

Is Prosperity Resources' Debt-to-EBITDA too high?

Prosperity Resources' current Debt-to-EBITDA is -1.70.

How does Prosperity Resources' Debt-to-EBITDA compare to competitors?

Prosperity Resources' Debt-to-EBITDA of -1.70 can be compared against companies in the Metals & Mining industry. The industry median Debt-to-EBITDA is 1.24. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.

What is a good Debt-to-EBITDA for a Metals & Mining company?

The median Debt-to-EBITDA among Metals & Mining companies is 1.24, based on 596 companies in the industry. Companies in the top quartile (top 25%) have a Debt-to-EBITDA significantly above this median, while those in the bottom quartile fall well below. However, Debt-to-EBITDA should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.

What does a high Debt-to-EBITDA mean?

A high Debt-to-EBITDA can signal that a stock is expensive relative to its fundamentals. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Prosperity Resources. For the Metals & Mining industry, the median Debt-to-EBITDA is 1.24 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Prosperity Resources's current Debt-to-EBITDA is -1.70. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.

Is Prosperity Resources stock overvalued right now?

Prosperity Resources (ASX:PSP) has a current Debt-to-EBITDA of -1.70. The current Debt-to-EBITDA is -1.70. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.

How is Debt-to-EBITDA calculated?

Debt-to-EBITDA is calculated from a company's financial statements. For Prosperity Resources (ASX:PSP), the current Debt-to-EBITDA is -1.70 as of Jun. 2016. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Prosperity Resources Business Description

Industry Basic Materials Metals & Mining

Comparable Companies ASX:NME ASX:GCR ASX:RBX ASX:NMG ASX:DTM ASX:FNT ASX:GED ASX:ARX ASX:DGO ASX:GGH ASX:DAU ASX:QNL ASX:AAJ ASX:CDT ASX:LCD ASX:LRL ASX:LSN ASX:HHM ASX:CVV ASX:VKA

Website http://www.prosperity.net.au

Prosperity Resources Limited (PSP) is an exploration company for gold and iron ore in the Murchison greenstone belt of Western Australia and copper/gold in the Tennant Creek Goldfield of Northern Territory.