I wouldn't call the balance sheet good myself, it may be liquid...

I wouldn't call the balance sheet good myself, it may be liquid and serviceable but not good.

Take these two companies below and tell me which makes more appeal on financials alone:

Company A
Net Cash $100 milliom
NPAT $50 million
Revenue $775
ROE 30%

Company B
Net debt $350-400 million
NPAT $70 million
Revenue $565
ROE 10% average at best

Company B will be paying down debt for the next 7-10 years, it may need a capital raising at some point, it is vulnerable to any sharp downturn or if they have a one off year of losses for whatever reason it will face immense pressure from banks.

Company A has a good balance sheet, A is FGE and B obviously EHL. FGE are yet to issue guidance and are more involved with lump sum contracting, EHL is however more of a service company, on this basis the market may appreciate EHL more. The downturn seems to be hitting everyone however. I do wish EHL good luck but I don't see them as a screaming buy right now and see many better opportunities out there myself. Hold at best.