LIQUOR STORES NA LTD 4.70 PCT DEBS T.LIQ.DB.B

huge exchange profit is excluded from earnings

[d_trump]

As the CAD depreciates, LIQ's US assets generate a significant exchange gain (ie value of inventory held in US).  Under GAAP this amount is NOT included in earnings but rather added directly to retained earnings.  If you look at the Q3 income statement you will see their ytd net earnings of $6,416 and then "other comprehensive income" of $13,089 for total "comprehensive income" of $19,505.  Even though it is not technically included in EPS, it is real and it bolsters the balance sheet significantly.

Their balance sheet is in great shape - their long term debt is almost entirely offset by their working capital surplus (largely inventory).  Market cap is now $180M or about $720,000 per store.  The average store sells $3M annually.  $720M for $3M sales is a joke.  Retail businesses are usually valued at about 1 times sales.

Unless their sales are cratering I see no need for a dividend cut.