Investment Thesis
Dynatronics is experiencing severe financial deterioration with contracting revenues (-15.8% YoY), persistent operating losses, and negative free cash flow generation. The company's tight liquidity position (1.07x current ratio, 0.50x quick ratio) combined with unprofitable operations and minimal cash reserves ($761.7K) creates substantial solvency concerns despite having no long-term debt.
Strengths
- Zero long-term debt eliminates refinancing risk
- Gross margin of 24.7% indicates some pricing power in core products
- Debt-free balance sheet provides theoretical flexibility for restructuring
Risks
- Revenue declining significantly (-15.8% YoY) indicating loss of market share or demand weakness
- Negative operating cash flow (-$93.3K) means company is burning cash from operations
- Critical liquidity stress with quick ratio of 0.50x and only $761.7K cash against $11.9M liabilities
- Persistent net losses (-$2.9% margin) with deteriorating EPS (-43.0% YoY)
- Negative interest coverage ratio (-0.9x) indicates inability to cover obligations from operations
- Return metrics deeply negative (ROE -6.6%, ROA -1.3%) showing value destruction
Key Metrics to Watch
- Operating cash flow trend - continued negative FCF threatens liquidity survival
- Revenue stabilization - must halt 15.8% annual decline to validate business model
- Quick ratio and cash position - watch for liquidity crisis indicators below 0.40x or cash depletion
Financial Metrics
Revenue
7.0M
Net Income
-201.9K
EPS (Diluted)
$-0.03
Free Cash Flow
-93.6K
Total Assets
15.0M
Cash
761.7K
Profitability Ratios
Gross Margin
24.7%
Operating Margin
-1.3%
Net Margin
-2.9%
ROE
-6.6%
ROA
-1.3%
FCF Margin
-1.3%
Balance Sheet & Liquidity
Current Ratio
1.07x
Quick Ratio
0.50x
Debt/Equity
0.00x
Debt/Assets
79.6%
Interest Coverage
-0.86x
Long-term Debt
0.0
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-23T22:36:10.722901 |
Data as of: 2025-09-30 |
Powered by Claude AI