Hi Clueso, My short answer is no, I'm not worried about the...

Hi Clueso,

My short answer is no, I'm not worried about the debt.

Debt to equity ratios can be misleading, particularly for capital light businesses with high ROE's. There are also all sorts of accounting implications which make it difficult to compare debt-to-equity ratios across companies without making adjustments to the financial statements. For example, if you were to capitalise the value of the Dulux brand on the balance sheet as an intangible asset, the debt to equity ratio would look relatively low.

I think in Dulux's case, a more instructive analysis looks at debt serviceability ratios such as interest cover.