Interpreting Financial Statements

[viciam]

Hi there, I am learning to teach myself how to analyse financial statements.

I am reading the transcript of a earnings call for Diana Shipping.

The CEO mentions this...

We continue to operate with a very manageable degree of leverage. long-term debt including current portion was US$424.5 million compared to stockholder’s equity of US$1.2 billion.

So what does this tell me? Is this good?

What ratio should I use to put these numbers together? Debt to Equity?

Thanks in advance

/Clueless in financial statements

 

[viciam]

Re: What should I interpret from this

And also this from the same transcript

"Diana has lowered it’s economic growth target to 7.5% from an 8% per annum of rate, which has been in place in 2005."

What do I make of this? Does this mean the company was growing at an annual rate of 8% since 2005 but is now expected to grow at 7.5%? Or have I perceived this incorrectly and is telling me something totally different?

Many thanks

 

[viciam]

I'm reading the transcript call for Diana Shipping

I came across this

The CEO says

"Diana’s investment strategy has not changed and we have an intend to continue acquiring ships through the downsize and managing the chartering program in what we’ve been referring to as the portfolio of stagnant maturity. We have been convinced that this is by far the best way forward, which will not only protect growth, but bring this about in a novelly manner and without taking a twist in balance sheet"

but later on in the earnings call the CFO says

"So we are at the stage we can buy now and we have to buy and we are the company (inaudible) that at the end of the period, we find ourselves with approximately 50% financed with bank lending, not with equity finance that with bank lending, and that’s what we are doing. And we will keep on doing it until the market starts picking up"

I don't get it, first he's saying they will buy acquire more ships by down sizing which I'm guessing he means will fund purchases internally but then later the CFO says they will use bank lending to make acquisitions. Or have I misunderstood this?

Can someone give their views please

thanks

 

[tech/a]

What's the stock code?

 

[ROE]

Hi there, I am learning to teach myself how to analyse financial statements.

I am reading the transcript of a earnings call for Diana Shipping.

The CEO mentions this...

We continue to operate with a very manageable degree of leverage. long-term debt including current portion was US$424.5 million compared to stockholder’s equity of US$1.2 billion.

So what does this tell me? Is this good?

What ratio should I use to put these numbers together? Debt to Equity?

Thanks in advance

/Clueless in financial statements

debt to equity ratio is a bull**** number, it has its use but the best way to talk up their debt level is to use that number

you want to concentrate on whether it can service the debt ...so interest cover is more important and its earning stability, do they have reoccuring revenue that bring in steady cash etc....

no point having net to equity 20% or whatever below what considered good etc...and you cant service the debt

dont rely on management word or market commentators they all spins and use bull**** jargon terms which could be bad for your pockets...

 

[yonobarn]

debt to equity ratio is a bull**** number, it has its use but the best way to talk up their debt level is to use that number

you want to concentrate on whether it can service the debt ...so interest cover is more important and its earning stability, do they have reoccuring revenue that bring in steady cash etc....

Well said. Viciam - try EBIT interest cover, ie ( EBIT / net interest expense ). EBIT is profit prior to paying interest obligations to creditors and the tax man. Let us know what you come up with for the most recent financial period. Then have a stab at what it will be in the next one.

 

[burglar]

What's the stock code?

Diana Shipping Inc. (NYSE: DSX)

http://www.google.com/finance?cid=697904