Survival – It’s All about Liquidity and Gearing

Continuing our recent trend of playing with numbers, we have decided this week to focus on survivability, which, for our purposes, we measure in terms of liquidity and leverage. For a selected group of companies which have reported 1st half results, we have calculated the debt to equity and net debt to equity ratios. We also show the cash position of these companies, which compared to just a couple of years ago is substantially lower, a reflection of this difficult market. While we show both the debt to equity and net debt to equity ratios, the latter in deference to the analysts, we prefer the former as we believe the cash will be long gone before it can be applied to the debt.

This is only an excerpt of Survival – It’s All about Liquidity and Gearing

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