Shares of Mullen Automotive (NASDAQ:MULN) are in the green this morning after the company gave investors a preview of its balance sheet. For the quarter ending March 31, the electric vehicle (EV) company expects to report cash and cash equivalents in excess of $65 million. A healthy cash balance is especially significant for Mullen as it works to start production for its FIVE electric SUV crossover. As a result, MULN stock is revving up today.
Why Is MULN Stock Up Today?
Mullen will use its cash and cash equivalent balance of $65 million to further strengthen its offerings. CEO David Michery added that:
“With the financing we received, we now have more than enough capital to execute on our commitments for 2022, including the start of the Mullen FIVE EV Crossover program and continued development on the Mullen ONE EV Cargo Van program. The Company’s balance sheet is the strongest it has ever been in our history.”
Mullen’s cash balance is even more significant when you take into account that it is trading at a market capitalization under $100 million. Investors can assess the financial stability and liquidity of a company using the cash to market cap ratio. Generally, a company with a ratio over 10% is financially stable.
Therefore, a market cap of $95 million would mean that Mullen has a cash to market cap ratio of 68%. However, this ratio is not an absolute indicator of financial stability. Additional metrics and ratios should be used in conjunction with the ratio to determine financial stability.
What’s Next for Mullen Automotive?
The EV manufacturer has several projects in the works, with its FIVE SUV crossover expected to begin production late this year. By 2024, the company expects deliveries for the FIVE to begin.
In addition, Mullen is working on a solid-state polymer battery. Data released last month shows that the battery can support a range of over 600 miles on a single charge. Furthermore, the battery can deliver a 300-mile range with just 18 minutes of direct current (DC) fast charging. Mullen expects to utilize this battery for its second generation of the FIVE SUV. The second generation FIVE is expected to begin prototype testing in 2025.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.