Wot waz ur job Bull befor you left 20 year ago to be ful tyme tradr?
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What I would really like to see, is someone brave enough to re-state the balance sheet, with the current numbers, taking into account the true assets (especially what withholdings are really held on balance and will never be repaid, vs what has to be paid out eventually) and genuine liabilities and debts without any 'underlying' assumptions.
From there we can do a true assessment of value. After that we can do a cashflow analysis, but we need to understand the true balance sheet first.
My DCF is broken because, despite the discount assumptions, very few of the basic inputs seems to be true based on current reporting, as they're distorted by other assumptions.
I've tried to reconcile the true balance sheet, but am so far unsuccessful as the numbers are so obfuscated I keep getting tied up in knots that my spreadsheet has errors all over it. Perhaps this is at the limit of my FA. It's annoying that I can't seem to do this myself, so reaching out for some help.
Can anyone help make some sense of this?
Ultimately though it all comes down to cashflow, the balance sheet as you know is just a list of assets and how they are funded. Means nothing if they can't produce cash.
As a lot of folk are finding out, cheap money when used to purchase expensive houses, stabi craft and Ford Rangers... Well it doesn't work out very well, even if they were paid 2% to borrow the money it would still be terrible.
I do like your idea but I see it as potentially very useful and potentially just technicality.
As you know, to me their balance sheet is everything, but all I need to understand roughly is the big picture - as discussed here often (in terms of the balance sheet). And then to be able to see that just a small return on assets will lead to huge returns on equity. And very low risk.
What we don't want is a small loss on Assets.
I mean just look at it this way - all of the assets are owned by the equity holders with a very small portion that has a claim on it by debt holders and another group that contractually has right of use of some of the assets with lots of obligations as well.
Remember, this is a business in transition.
Since FY23 it has ceased to operate 5 resthomes, and has 7 more for sale ( one was under contract by 30 Sept). Already it has lost 255 care beds in just six months with likely at least that many more on the block currently. So revenue will fall, along with staff costs and other operating overhead, and the underlying asset base will be adjusted (albeit the two leasehold facilities were the first to be exited, and one other facility was simply closed without the land and buildings being onsold at that juncture). This swing away from care beds to village units has been ongoing since listing but is definitely accelerating now that underlying circumstances are more permissive.
So if that pivot continues, as it surely will, then spreadsheet comparison isn't easy, further compounded by the acquisitions of operating facitities with development potential.
It will take time for this business to reach a more stable operating base and the fog to lift.
shame Azz gone. offered good reasonable debate. like SR lol