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DAVOUT
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AUERSTADT
Jun 2002
time: 05:30
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quote:
Originally posted by Japher
Question on comparing companies debt: are those debts measured on an even scale? What I mean is these companies from different nations have different governments in which to deal with. Some of them can't sink their debt through depreciation of assets such as land and equipment, since in some of these places the company doesn't own the land or the buildings... Also, when looking at Japan they do a lot of buisness with places like China (or at least have more companies that do) who doesn't float their currency, which could result in losses unless they hedge the yen against it, possibly resulting in debt. So, what I mean are all these international factors calculated into these debt ratios so that these comparisons can be made on even ground? |
At year end, the general rule is that all asset or liability items the nominal of which is in foreign currency must be valued at the rate of the market. This risk exists for all companies exporting or importing in foreign currencies, even if the said currencies float, and should be hedge unless the company intends to speculate. As a balance sheet is established in one currency, and one only, and is supposed to be a picture of the company at one specific instant (year end), we can say that the scale is even for all public companies.
Incidently, as the trade between China and Japan is mostly made in yens, and possibly partly in US$, it would require only a hedge of the $ portion, which in any case would result in a P&L entry and not in a debt.
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:30
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Here's an article about Dell trying to make it into new markets, especially consumer electronics. Some of the market share numbers were a revelation to me (32% of the US PC market), although perhaps it shouldn't have been.
http://news.ft.com/servlet/ContentS...p=1012571727088
Consumer electronics seems like a trickier business to me, with strong competitors and brand names like Sony (9 inventory turns/year). But it's tough to argue against a company when they have managed so far to execute their business plans so well. I agree that consumer electronics is becoming increasingly standardized, so maybe they can replicate their model in select markets.
One anecdotal thing to note is that my Dell branded LCD monitor sat in somebody's inventory for over a month. Manufactured in July '03 in Mexico. On my desk in September.
Last edited by DanS on 09-10-2003 at 00:21
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:30
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Hmmm... Maybe it's less exclusive technology than I thought. Thanks for mentioning that.
GP: Re stereo receivers, yes that's a product that is modular. Have you ever opened one up to take a look inside?
Re a PC as a receiver, there are already people out there doing that. I could build you a very high quality one for about $600 with parts off the shelf in an evening's time. The only thing that would need to be custom for the likes of Dell are the amplifiers (basically all of the non-digital parts). As it stands now, a do-it-yourselfer has to have a separate amp for each channel of audio. Quite doable, but still a mess.
Last edited by DanS on 09-10-2003 at 05:42
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:30
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Some good news. The federal deficit came in at $374 billion in FY '03, when we were all expecting a deficit of over $400 billion. Not bad for a fiscal year in which 325,000 troops were put in theater and 150,000 fought a war.
Spending came in at 20.3% of GDP, which is about the midpoint of the very stable spending range since WWII (not including the first Reagan administration, which was an anomaly to the high side). Taxation was pretty low.
Here is a good article laying out all of the top-level details.
http://www.washingtonpost.com/wp-dy...-2003Oct10.html
All in all, if this holds up, and they keep spending increases to 4 or 5%, then I would say that this has been a very successful fiscal policy response to economic conditions by the Bush administration. It was a little scary going through it, though.
I'm guessing that there will still be some negative politics associated with it for the next half year or so. The mood in the article seems to indicate this.
Last edited by DanS on 11-10-2003 at 09:54
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HershOstropoler
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Well if you throw ultra-low interest rates, a liquidity surge, a housing bubble and a couple hundred billion in fiscal stimulus at the economy, it's enough to make an old elephant dance. The question is, for how long... everything is now tied to the debt game.
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HershOstropoler
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What was our bet?
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07-10-2003 09:27
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