Posted by Invest123 > Jan 12, 2015 11:10 PM | Report Abuse
Do not worry as the management might use the methods below to reduce the gearing:
Sell shares. The board of directors could authorize the sale of shares in the company, which could be used to pay down debt.
AS AN INVESTOR, I WON'T BUY THE SALES OF SHARES FROM THE COMPANY BECAUSE I CAN'T CONVINCE MYSELF IF THERE IS ANY SIGNIFICANT VALUE FOR LONDON BISCUITS, WHATEVER ABSOLUTE VALUATION METHOD I USED.
A COMPANY RESORTING TO SALE OF ADDITIONAL SHARES TO THE PUBLIC OR ANY PRIVATE INVESTOR, JUST BECAUSE OF TO PAY DOWN DEBT, MAY NOT BE A GOOD SIGN AS ADDITIONAL SHARES DILUTE EARNINGS PER SHARE,AND LENDERS HAVE NO CONFIDENCE IN ITS PRESENT HIGH DEBT.
Convert loans. Negotiate with lenders to swap existing debt for shares in the company.
CONVERT DEBT TO SHARES? WHICH LENDER WANT AFTER LOOKING AT LONDON BISCUITS PAST PERFORMANCE AND CASH FLOW? IF I AM A BANKER, I WON'T WANT. IN FACT, I MAY HAVE REGRETTED LENDING TO IT IN THE FIRST PLACE.
MORE SHARES OUTSTANDING DILUTE EARNINGS PER SHARE ALSO.UNLESS FORCED TO, IT MAY NOT BE GOOD FOR THE COMPANY.
Reduce working capital. Increase the speed of accounts receivable collections, reduce inventory levels, and/or lengthen the days required to pay accounts payable, any of which produces cash that can be used to pay down debt.
LOOK ST THE TABLE BELOW. DOES IT APPEAR THAT NET WORKING CAPITAL IS REDUCING AFTER TALKING ABOUT IT EVERY YEAR? ANY SIGN THAT RECEIVABLES ARE REDUCING?
I DO SEE INVENTORIES REDUCING. IS IT BECAUSE MANAGEMENT EFFICIENCY OR JUST BUSINESS IS NOT DOING WELL AND HENCE NO POINT HAVING REASONABLE LEVEL OF INVENTORIES?
PAYABLE SEEMS TO BE REDUCING. IS IT BECAUSE OF MANAGEMENT EFFICIENCY OR JUST "BAD LEG", OR REFUSING TO PAY CREDITORS ON TIME? IS THIS SUSTAINABLE? DO YOU WANT TO DO BUSINESS WITH THEM?
Increase profits. Use any methods available to increase profits, which should generate more cash with which to pay down debt.
INCREASE PROFITS? DON'T SEEM TO SEE THAT OVER THE YEARS. BUT I DO SEE INCREASING REVENUE, INCREASING CAPITAL EMPLOYED, INCREASING PPE, INCREASING DEBTS, INCREASING SHARE CAPITAL, BUT NOT INCREASING PROFIT.
....So it's up to the management! Good luck.
YEAH MAN, GOOD LUCK, THE MANAGEMENT NEEDS PLENTY OF LUCK FOR THE FUTURE.
DO NOT WORRY? IF I AM INVESTED IN LONDON BISCUITS, I WOULD WORRY LIKE SHIT.
Sorry I don't know any of those stocks you mentioned.
Yeah, we are matured people. We talk about stocks and things, what we think about them, not hantam people.
Biscuits are nice to eat. But like all other things, some biscuits really suck. Of course individual taste is different, but some biscuits really suck.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
samurai
37 posts
Posted by samurai > 2015-01-29 11:26 | Report Abuse
Can anyone advised when the free bonus warrant will be credited? Thanks in advance