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. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given this risk, we thought we’d take a look at whether Marks Electrical Group (LON:MRK) shareholders should 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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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. When Marks Electrical Group last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth UK£1.5m. Looking at the last year, the company burnt through UK£3.1m. That means it had a cash runway of around 6 months as of September 2025. Notably, however, analysts think that Marks Electrical Group will break even (at a free cash flow level) before then. If that happens, then the length of its cash runway, today, would become a moot point. The image below shows how its cash balance has been changing over the last few years.
Check out our latest analysis for Marks Electrical Group
Marks Electrical Group boosted investment sharply in the last year, with cash burn ramping by 65%. While that’s concerning on it’s own, the fact that operating revenue was actually down 6.6% over the same period makes us positively tremulous. Considering both these metrics, we’re a little concerned about how the company is developing. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.
Marks Electrical Group revenue is declining and its cash burn is increasing, so many may be considering its need to raise more cash in the future. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. We can compare a company’s cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year’s operations.