Myer Total Debt/Equity ratio....now close to 3!

Myer results came out today. Pretty underwealming, especially compared to DJ's, its main competitor.

One thing that stands out is that DJ's 38 stores are better at raising revenue than Myers 66 stores...Dj per store revenue is $26.9 million for the half, vs Myers $21.9 million for the half.

And then we get to debt. When you include DJ's non-cancellable operating leases (discounted at 4.4% interest rate) of $1.1 billion to the on-balance sheet debt of $45 million, you get total debt of $1.15 billion. Equity for DJ's is $840 million, leading to a Debt to Equity ratio of 1.37. Not bad

But Myer's non-cancellable operating leases (discounted at 4.2% interest rate) is equal to $2.5 billion. Add on the balance sheet debt of $306 million and you get a total of $2.8 billion! Huge. On an equity total of $938 million, that gives you a debt/equity ratio of 2.9!!!

Maybe that is the real reason why Myer wants to merge with David Jones!