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22/08/17
13:24
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Originally posted by madamswer
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My point is that it is easy to pick one or two figures out of an annual report and say how bad it is, but I think there is a bigger picture here and to me I can see the investment in growth and future earnings. Not trying to be argumentative, but that's how I view things. Each to their own.
Sure, but I'm responding to the one figure you happened to pick, namely "gearing", as a measure of solvency, when it is a meaningless measure given the nature of GXL's equity base.
When your balance sheet is purely intangible, quoting debt as a proportion of such a balance sheet is flawed. The lending to GXL is cash flow based, not asset based; hence you need to look at coverage ratios.
And all I'm saying is that they are high for a retailer...well, too high for my liking.
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I mentioned gearing because you said in your intial post they were "heavily geared", so I responded. But that's ok, we can agree to disagree. I guess that's why I hold shares in GXL and you don't.