Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. By way of example, Sinaran Advance Group Berhad (KLSE:SINARAN) has seen its share price rise 189% over the last year, delighting many shareholders. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?
In light of its strong share price run, we think now is a good time to investigate how risky Sinaran Advance Group Berhad's cash burn is. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves.
How Long Is Sinaran Advance Group Berhad's Cash Runway?
A company's cash runway is calculated by dividing its cash hoard by its cash burn. In June 2026, Sinaran Advance Group Berhad had RM9.8m in cash, and was debt-free. Importantly, its cash burn was RM2.4m over the trailing twelve months. That means it had a cash runway of about 4.1 years as of June 2026. A runway of this length affords the company the time and space it needs to develop the business. The image below shows how its cash balance has been changing over the last few years.
View our latest analysis for Sinaran Advance Group Berhad
How Well Is Sinaran Advance Group Berhad Growing?
Happily, Sinaran Advance Group Berhad is travelling in the right direction when it comes to its cash burn, which is down 71% over the last year. Mundanely, though, operating revenue growth was flat. We think it is growing rather well, upon reflection. In reality, this article only makes a short study of the company's growth data. You can take a look at how Sinaran Advance Group Berhad has developed its business over time by checking this visualization of its revenue and earnings history.
How Hard Would It Be For Sinaran Advance Group Berhad To Raise More Cash For Growth?
There's no doubt Sinaran Advance Group Berhad seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.
Sinaran Advance Group Berhad has a market capitalisation of RM137m and burnt through RM2.4m last year, which is 1.7% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
How Risky Is Sinaran Advance Group Berhad's Cash Burn Situation?
As you can probably tell by now, we're not too worried about Sinaran Advance Group Berhad's cash burn. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. Although its falling revenue does give us reason for pause, the other metrics we discussed in this article form a positive picture overall. Looking at all the measures in this article, together, we're not worried about its rate of cash burn, which seems to be under control. On another note, Sinaran Advance Group Berhad has 3 warning signs (and 1 which can't be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.