What is the state of companies' cash structures and debt levels?
Last Thursday, the Central Bank of the Republic of Turkey (CBRT) announced its policy rate decision. The bank raised the policy rate by 500 basis points, exceeding expectations (250 basis points), increasing it from 35% to 40%. As rising interest rates mean higher financing costs, eyes have turned to the cash structures and debt levels of companies.
We are going through a period where accessing money is difficult due to rising financing costs. In this sense, it is possible to think that an environment where companies will have difficulty accessing the financing they need could have a negative impact on operations and the appetite for new investments.
It can be said that companies with low debt ratios and net cash positions have an advantage in the current period. It can be considered that companies with strong net cash positions will be exposed to financing problems at a minimum level in debt payments, investment activities, R&D, and other activities, or may even generate financing income.
News Source: 12punto
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