TSX:DA.DB.A - Post by User
Comment by
Mongoose11on Sep 13, 2011 9:51pm
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Post# 19039330
RE: RE: Balance Sheet perspective
RE: RE: Balance Sheet perspectiveI spent a few minutes reviewing the financials on the DA website. My thoughts are;
-the debt has dropped by 18 million in the last 6 months. Of this 13 million was the shareholder deal and 5 million was organic. The debt/equity ratio dropped from 1.85 to 1.25 which is a very good improvement (I am only counting non lease/line of credit borrowings). The management has clearly realized that debt is a problem and are taking steps to reduce it.
-The interest rates are on the way down as well although I still find them too high. Hopefully they can collect enough working capital in the next quarter to pay down the 11 million line of credit. Even though the rate is dropping on the line from 18% to 13% it is still onerous. There is enough outstanding accounts receivable to eliminate the amount owing. If this doesn't happen in Q-3 there is a problem in my opinion.
-They are purchasing 4 aircraft in Europe next year. I wonder what they are?
All in all things ae moving in the right direction at a fairly good clip.
If I was the CFO I would focus on finding a better line of credit deal and work on collecting the rapidly growing accounts receivable. I realize that this is mainly due to the growth of the Technical Services entity but the A/R to A/P ratio has grown from 1.4 to 2.3 during the last 6 months and needs to turn around.