Confident Investing Starts With TipRanks Premium

Get 55% Off
TipRanks
Go Ultimate55% OFF

Cardinal Ethanol (CRDE) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Cardinal Ethanol disclosed 39 risk factors in its most recent earnings report. Cardinal Ethanol reported the most risks in the “Production” category.

Risk Overview Q2, 2024

Source: the company's latest filing for the period ended Jun 30, 2024, filed Aug 13, 2024

Risk Distribution
39Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Cardinal Ethanol disclosed risks per quarterNo. of Risks3234363840Q3Q4Q12023Q2Q3Q4Q12024Q2Showing: Q2, 2024
Risks removedRisks addedRisks changedCardinal Ethanol Risk Factors
  • Corporate Activity and Growth - Risk 1
    On January 31, 2024, we purchased through our wholly owned subsidiary, Cardinal Colwich, LLC, an idled ethanol plant in Colwich, Kansas. We have faced and may continue to face challenges in getting the plant to fully operational status.

    Our acquisition of the Kansas Plant and restarting operations entails risks and uncertainties that could adversely affect our business, financial condition, and results of operations. Ethanol production is a complex process involving various technical, logistical, and regulatory considerations. We have encountered and could encounter in the future operational challenges such as equipment malfunctions, process inefficiencies, supply chain disruptions, or compliance issues that could delay production ramp-up and increase operating costs. Further, ethanol production is subject to stringent environmental, safety, and regulatory requirements at the federal, state, and local levels. Restarting operations at the Kansas Plant has required us to obtain or renew permits, licenses, and approvals from regulatory authorities, which has been time-consuming, costly, and subject to regulatory scrutiny. The inability to successfully bring the Kansas Plant to fully operational status may negatively impact the value of our units.

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade
Legal & Regulatory (1)
Production (2)
Ability to Sell (1)

Risk Highlights Q2, 2024

Main Risk Category
Production
With 13 Risks
Number of Disclosed Risks
39
No changes from last report
S&P 500 Average: 32
Recent Changes
5Risks added
0Risks removed
0Risks changed
Since Jun 2024
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

consumer resistance to the use of ethanol based on the belief that ethanol isexpensive, uses too much corn, adds to air pollution, harms engines and/or takes more energy toproduce than it contributes may affect the demand for ethanol.adds to air pollutionour trading division uses derivative contracts to reduce volatility in the commodity markets. non-performance by the counter-parties to those contracts could adversely affect our future results of operations and financial position.derivative contracts to reduce volatilitywe may violate the terms of our credit agreements and financial covenants which could result in our lender demanding immediate repayment of our loans.terms of our credit agreementsreductions in distillers grains exports to china have a negative effect on the price of distillers grains in the u.s. and could negatively affect our profitability.distillers grains exports to chinaif a substantial portion of our inventory becomes damaged or obsolete, its value would decrease and our profit margins would suffer.substantial portion of our inventorythe california low carbon fuel standard may decrease demand for corn based ethanol which could negatively impact our profitabilitycalifornia low carbon fuel standardour existing debt financing agreements contain, and our future debt financing agreements may contain, restrictive covenants that limit distributions and impose restrictions on the operation of our business.our existing debt financing agreementsour existing debt financing agreements contain, and our future debt financing agreements may contain, restrictive covenants that limit distributions and impose restrictions on the operation of our business.our future debt financing agreementsgovernment incentives for ethanol production may be eliminated in the future, which could hinder our ability to operate at aprofithinder our ability to operatechanges and advances in ethanol production technology could require us to incurcosts to update our plant or could otherwise hinder our ability tocompete in the ethanol industry or operate profitably.hinder our ability tocompete

Risk Factors Full Breakdown - Total Risks 39

Manufacturing1 | 2.6%
  • Manufacturing - Risk 1
    Changes and advances in ethanol production technology could require us to incurcosts to update our plant or could otherwise hinder our ability tocompete in the ethanol industry or operate profitably.

    Changes and advances in ethanol production technology could require us to incur costs to update our plant or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.  Advances and changes in the technology of ethanol production are expected to occur.  Such advances and changes may make the ethanol production technology installed in our plant less desirable or obsolete.  These advances could also allow our competitors to produce ethanol at a lower cost than we are able.  If we are unable to adopt or incorporate technological advances, our ethanol production methods and processes could be less efficient than our competitors, which could cause our plant to become noncompetitive or completely obsolete.  If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our ethanol production remains competitive.  Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures.  These third-party licenses may not be available or, once obtained, they may not continue to be available on commercially reasonable terms.  These costs could negatively impact our financial performance by increasing our operating costs and reducing our net income.

Employment / Personnel3 | 7.7%
Supply Chain2 | 5.1%
Costs7 | 17.9%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.