Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and looking for potential opportunities? Have you considered the financial health of Oxford Square Capital Corp. (OXSQ)? As of December 31, 2024, the company reported a Net Asset Value (NAV) of $2.30 per share, with a net investment income of $6.0 million, or $0.09 per share. But how do these figures truly reflect the company's stability and growth potential, and what key insights can investors glean from a deeper analysis?

Oxford Square Capital Corp. (OXSQ) Revenue Analysis

Understanding Oxford Square Capital Corp.'s (OXSQ) revenue streams is crucial for investors. The company primarily generates revenue through:

• Providing capital to established businesses
• Investing in syndicated bank loans
• Purchasing debt and equity tranches of collateralized loan obligations (CLOs)

For the fiscal year 2024, Oxford Square Capital Corp. reported a total investment income of $42.7 million. This represents a decrease of $9.1 million from the previous year, mainly due to a reduction in interest income from debt investments.

Here's a closer look at the revenue performance:

• 2024 Annual Revenue: $42.68 million, a decrease of -17.64% year-over-year.
• Q4 2024 Revenue: $10.2 million, down 1.2% from the previous quarter.

Despite the overall decrease in revenue, certain aspects of OXSQ's investment portfolio showed positive trends:

• The weighted average yield on debt investments improved to 15.8%, up from 13.3% in the previous year.
• The cash distribution yield on cash income-producing CLO equity investments slightly increased to 16.2% from 15.3% on a sequential basis.

In Q4 2024, OXSQ reported total investment income of $10.2 million, which included $5.4 million from debt investments, $4.1 million from CLO equity investments, and $0.8 million from other income.

While total revenues experienced a decline, OXSQ actively manages its portfolio, as evidenced by the following activities in Q4 2024:

• New investments of approximately $25.1 million.
• Receipt of approximately $22.0 million from sales and repayments of investments.

For additional insights into Oxford Square Capital Corp.'s mission, vision, and core values, you can visit: Mission Statement, Vision, & Core Values of Oxford Square Capital Corp. (OXSQ).

Oxford Square Capital Corp. (OXSQ) Profitability Metrics

Analyzing Oxford Square Capital Corp.'s (OXSQ) profitability involves scrutinizing several key metrics, including gross profit, operating profit, and net profit margins. These figures provide insights into the company's efficiency in generating earnings relative to its revenue and operational costs. A comprehensive assessment also includes examining trends in these profitability ratios over time and benchmarking them against industry averages to gauge OXSQ's competitive positioning and performance.

For the fiscal year 2023, Oxford Square Capital Corp. reported:

• Total Investment Income: $73.3 million
• Net Investment Income: $27.7 million, or $0.79 per share

However, the company experienced a net loss of $39.4 million, or $1.12 per share, primarily due to net unrealized losses on investments and realized losses. Despite these losses, OXSQ's ability to generate investment income remains a critical factor in evaluating its financial health.

When evaluating operational efficiency, factors such as cost management and gross margin trends are vital. For instance, the company’s expense ratio and its ability to maintain or improve gross margins on its investments can significantly impact overall profitability.

Further details can be found in their financial statements and related SEC filings, offering a more detailed look into their financial performance. Keep an eye on how they manage expenses and maintain healthy margins on their investments.

Oxford Square Capital Corp. (OXSQ) Debt vs. Equity Structure

Understanding how Oxford Square Capital Corp. (OXSQ) manages its debt and equity is crucial for assessing its financial health. This involves looking at its debt levels, debt-to-equity ratio, and recent financing activities.

As of December 31, 2023, Oxford Square Capital Corp. reported the following debt-related figures from its balance sheets:

• Total investments at cost: $766,041,784
• Total investments at fair value: $707,617,234
• Total assets: $738,973,487
• Total liabilities: $335,678,896

The company's debt-to-equity ratio can be calculated using the total liabilities and total stockholders’ equity. As of December 31, 2023, the total stockholders’ equity was $403,294,591. Therefore, the debt-to-equity ratio is approximately 0.83 ($335,678,896 / $403,294,591). This ratio indicates the proportion of debt Oxford Square Capital Corp. uses to finance its assets relative to the equity.

Here's a more detailed breakdown of the liabilities as of December 31, 2023:

• Senior secured notes payable: $196,000,000
• Convertible notes: $57,500,000
• Notes payable: $35,000,000
• Credit Facility: $10,000,000
• Other liabilities: $37,178,896

Oxford Square Capital Corp. actively manages its debt through various strategies, including new issuances and refinancing. For instance, the company has issued both secured and unsecured notes to optimize its capital structure. These actions aim to lower interest expenses and extend debt maturities.

Balancing debt and equity is essential for managing risk and enhancing returns. Too much debt can increase financial risk, while too little debt may limit growth opportunities. Oxford Square Capital Corp. strives to maintain an optimal mix to support its investment activities and deliver value to shareholders.

Additional insights into Oxford Square Capital Corp. and its investors can be found here: Exploring Oxford Square Capital Corp. (OXSQ) Investor Profile: Who’s Buying and Why?

Oxford Square Capital Corp. (OXSQ) Liquidity and Solvency

When evaluating Oxford Square Capital Corp.'s financial health, understanding its liquidity and solvency is crucial. These metrics provide insights into the company's ability to meet its short-term and long-term obligations, which is vital for investors. Let’s delve into the key aspects of OXSQ's liquidity.

Assessing Oxford Square Capital Corp.'s Liquidity:

Liquidity ratios, such as the current and quick ratios, are essential tools for assessing a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity.

• Current and Quick Ratios: These ratios measure the extent to which current assets can cover current liabilities.
• Working Capital Trends: Monitoring the trend in working capital (current assets minus current liabilities) can reveal whether a company's short-term financial health is improving or deteriorating.

Cash Flow Statements Overview:

Analyzing cash flow trends from operating, investing, and financing activities provides a comprehensive view of how Oxford Square Capital Corp. generates and uses cash.

• Operating Cash Flow: Cash generated from the company's core business operations. Consistent positive operating cash flow is a healthy sign.
• Investing Cash Flow: Cash flow related to the purchase and sale of long-term assets.
• Financing Cash Flow: Cash flow related to debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

Identifying potential liquidity concerns or strengths involves examining various financial metrics and trends. For instance, a declining current ratio or negative operating cash flow could signal liquidity issues. Conversely, a strong cash position and increasing working capital could indicate financial strength.

For a deeper dive into Oxford Square Capital Corp.'s financial health, you can explore a detailed analysis at Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors.

Oxford Square Capital Corp. (OXSQ) Valuation Analysis

Assessing whether Oxford Square Capital Corp. (OXSQ) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment.

Currently, comprehensive real-time data for specific valuation ratios like Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) for Oxford Square Capital Corp. as of late April 2025 is not available. These metrics fluctuate daily based on market conditions and new financial data. For the most up-to-date information, refer to financial news outlets such as Yahoo Finance, Bloomberg, or reputable financial analysis platforms.

Analyzing the stock price trends of Oxford Square Capital Corp. (OXSQ) over the past 12 months is essential. Recent data indicates:

• As of 2024, OXSQ had a dividend yield of approximately 13.27%.
• The annual dividend payout was $0.48.
• The ex-dividend date was recorded on March 27, 2024.

These figures provide insight into the income return relative to the stock price.

The dividend yield, which reflects the annual dividend payment relative to the stock price, is a crucial factor for income-focused investors. Oxford Square Capital Corp.'s dividend yield and payout ratio should be evaluated in comparison to industry peers and historical averages to determine its attractiveness and sustainability. Keep in mind that BDCs are required to distribute most of their income, which typically results in high dividend yields.

Analyst consensus on Oxford Square Capital Corp.'s stock valuation offers another perspective. These ratings, typically categorized as 'buy,' 'hold,' or 'sell,' represent the collective opinion of financial analysts covering the stock. As of late April 2025, the consensus rating and price targets can vary. To find the latest analyst ratings, consult financial news sources and analyst reports from investment banks and research firms.

Here's a summary of key valuation considerations:

• P/E Ratio: Indicates how much investors are willing to pay for each dollar of earnings.
• P/B Ratio: Compares the company's market capitalization to its book value, highlighting whether the stock is overvalued relative to its net asset value.
• EV/EBITDA: Provides a valuation measure that is independent of capital structure and accounting policies.
• Stock Price Trends: Analyzing historical stock performance helps identify potential patterns and investor sentiment.
• Dividend Yield and Payout Ratio: Key metrics for assessing the attractiveness and sustainability of dividend payments.
• Analyst Consensus: Reflects the collective opinion of financial experts on the stock's potential.

For a deeper dive into who is investing in OXSQ and potential motivations, see Exploring Oxford Square Capital Corp. (OXSQ) Investor Profile: Who’s Buying and Why?

Oxford Square Capital Corp. (OXSQ) Risk Factors

Oxford Square Capital Corp. (OXSQ) faces a variety of internal and external risks that could impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Industry Competition: The market for investment management, especially business development companies (BDCs), is intensely competitive. Oxford Square Capital Corp. competes with numerous other BDCs, private equity funds, hedge funds, and other investment vehicles. Increased competition can lead to lower investment yields and reduced profitability. The company's ability to source and manage attractive investment opportunities is constantly challenged by these competitive pressures.

Regulatory Changes: As a BDC, Oxford Square Capital Corp. is subject to extensive regulations under the Investment Company Act of 1940. Changes in these regulations, or interpretations thereof, could significantly impact the company's operations, compliance costs, and financial performance. For example, changes in regulations governing leverage, capital requirements, or permitted investments could force the company to alter its investment strategy or capital structure.

Market Conditions: Oxford Square Capital Corp.'s performance is closely tied to broader market conditions, including interest rates, economic growth, and credit spreads. Economic downturns or periods of market volatility can negatively impact the value of its investment portfolio and its ability to generate income. Rising interest rates can increase the company's borrowing costs, while widening credit spreads can reduce the value of its debt investments.

Operational Risks: Oxford Square Capital Corp. faces several operational risks, including:

• Investment Selection: The risk of making poor investment decisions that result in losses.
• Portfolio Management: Challenges in effectively managing and monitoring its investment portfolio.
• Valuation: Difficulties in accurately valuing illiquid or hard-to-value investments.
• Cybersecurity: Threats to its data and systems from cyber attacks.

Financial Risks: Financial risks for Oxford Square Capital Corp. include:

• Leverage: The use of leverage to enhance returns, which also magnifies losses.
• Liquidity: The risk of being unable to meet its financial obligations as they come due.
• Credit: The potential for borrowers to default on their debt obligations.
• Interest Rate: Fluctuations in interest rates that can impact its net interest income.

Strategic Risks: Strategic risks include:

• Investment Strategy: The risk that its investment strategy may not be successful in generating attractive returns.
• Capital Allocation: Challenges in effectively allocating capital across different investment opportunities.
• Market Competition: The risk of losing market share to competitors.

Oxford Square Capital Corp.'s Form 10-K, filed with the SEC, discusses risk management strategies. While specific details may vary over time, these strategies generally include:

• Diversification: Spreading investments across different industries and asset classes to reduce concentration risk.
• Due Diligence: Conducting thorough due diligence on potential investments to assess their risk-return profiles.
• Active Monitoring: Actively monitoring its investment portfolio to identify and address potential problems.
• Hedging: Using hedging strategies to mitigate interest rate and other market risks.

Investors can further explore the profile of those investing in Oxford Square Capital Corp. at: Exploring Oxford Square Capital Corp. (OXSQ) Investor Profile: Who’s Buying and Why?

Oxford Square Capital Corp. (OXSQ) Growth Opportunities

For investors eyeing Oxford Square Capital Corp. (OXSQ), understanding the company's potential for future growth is crucial. Several factors, from strategic initiatives to competitive advantages, play a significant role in shaping its trajectory.

Key Growth Drivers:

• Strategic Initiatives: Oxford Square Capital Corp. (OXSQ) is likely focusing on initiatives to optimize its investment portfolio and capital structure.
• Market Expansion: Identifying and capitalizing on opportunities within the credit markets is vital for revenue growth.
• Acquisitions: Strategic acquisitions or partnerships could expand Oxford Square Capital Corp. (OXSQ)'s reach and capabilities.

Future Revenue Growth Projections and Earnings Estimates: While specific projections require up-to-date financial analysis, investors can monitor Oxford Square Capital Corp. (OXSQ)'s earnings reports and analyst estimates for insights into anticipated revenue growth and profitability. Keep an eye on metrics such as net investment income (NII) and its ability to maintain or grow its asset base.

Strategic Initiatives and Partnerships: Oxford Square Capital Corp. (OXSQ)'s growth may be influenced by:

• Partnerships: Collaborations with other financial institutions or companies could open new avenues for investment and growth.
• Technological Adoption: Embracing technology to improve efficiency and decision-making in investment processes.

Competitive Advantages: Oxford Square Capital Corp. (OXSQ)'s ability to stand out in the competitive landscape is crucial for sustained growth. Potential competitive advantages include:

• Expertise: A skilled management team with a proven track record in credit investments.
• Access to Deal Flow: Strong relationships and networks that provide access to attractive investment opportunities.
• Efficient Operations: Streamlined processes that allow for effective deployment of capital.

Here is more information about Oxford Square Capital Corp. (OXSQ): Mission Statement, Vision, & Core Values of Oxford Square Capital Corp. (OXSQ).