AMC is a theatrical exhibition business, which makes majority of its revenue from box office admissions and food/beverage sales. Due to the government lockdown and movie theatre closures, AMC’s sales dwindled. AMC suffered large losses in 2020, and is struggling to keep its distance from bankruptcy. As the company takes on more debt and does additional equity financing, it is important of us, value investors, to fundamentally analyze this company. This week, I review AMC’s 8-K Current Report, and its Key Ratios. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
In the video, I also go over how management is issuing millions of additional shares, which is diluting existing shareholder’s ownership within the company. With the increased interest payments brought about by taking on more debt, AMC will have a tough time returning back to its pre-pandemic profitability. This is a company that is struggling to stay afloat, and may not be far away from declaring bankruptcy.
0:25 Current Report (8-K)
4:35 Top 3 Risk Factors
6:07 Key Ratios Analysis
12:50 Summary / Conclusion
AMC’s Website: here
Morningstar Key Ratios Link: here.
Useful Resources here.
Company overview: AMC Entertainment Holdings, Inc. is an American movie theater chain headquartered in Leawood, Kansas, and the largest movie theater chain in the world. Founded in 1920, AMC has the largest share of the U.S. theater market ahead of Regal and Cinemark Theatres.
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