Been running the numbers of the latest Qantas report...some troubling things for current/future investors
Apart from the losses, which are bad enough, there are some questions on the Balance Sheet. Current Ratio has dropped to 0.7 and Debt/Equity has hit over 2 for the first time in a while (2.4). This has got to put some pressure on the credit rating. Wouldn't surprise me if the credit agencies start sharpening the pencils.
The old sell and lease back trick was performed (in the cash flow statement) to create 258 million of cash through the Financing section. Not a great sign. Cash flow from Investing activities (usually an indicator of future revenue growth) also decreased.
Back on the Income Statement, operating costs grew at 9.5%, but revenues grew at only 5.6%.
All up, it seems there might be some pressure on financing in the future. Could explain why Joyce has deferred spending on new capital for a couple of years. Maybe the banks said "No more debt for you"
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