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    We're Not Very Worried About Tan Delta Systems' (LON:TAND) Cash Burn Rate

    Simply Wall St·10/01/2026 05:19:46
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    Just because a business does not make any money, does not mean that the stock will go down. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

    So should Tan Delta Systems (LON:TAND) shareholders be worried about its cash burn? In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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    Does Tan Delta Systems Have A Long Cash Runway?

    You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. In June 2026, Tan Delta Systems had UK£846k in cash, and was debt-free. In the last year, its cash burn was UK£1.2m. So it had a cash runway of approximately 8 months from June 2026. That's quite a short cash runway, indicating the company must either reduce its annual cash burn or replenish its cash. Depicted below, you can see how its cash holdings have changed over time.

    debt-equity-history-analysis
    AIM:TAND Debt to Equity History October 1st 2026

    Check out our latest analysis for Tan Delta Systems

    How Well Is Tan Delta Systems Growing?

    We reckon the fact that Tan Delta Systems managed to shrink its cash burn by 28% over the last year is rather encouraging. On top of that, operating revenue was up 35%, making for a heartening combination It seems to be growing nicely. In reality, this article only makes a short study of the company's growth data. You can take a look at how Tan Delta Systems is growing revenue over time by checking this visualization of past revenue growth.

    Can Tan Delta Systems Raise More Cash Easily?

    Even though it seems like Tan Delta Systems is developing its business nicely, we still like to consider how easily it could raise more money to accelerate growth. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

    Tan Delta Systems has a market capitalisation of UK£16m and burnt through UK£1.2m last year, which is 7.3% of the company's market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.

    So, Should We Worry About Tan Delta Systems' Cash Burn?

    Even though its cash runway makes us a little nervous, we are compelled to mention that we thought Tan Delta Systems' revenue growth was relatively promising. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Tan Delta Systems' situation. Taking a deeper dive, we've spotted 4 warning signs for Tan Delta Systems you should be aware of, and 2 of them don't sit too well with us.

    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)