At the current time for me those calc's (EBITDAX and DD&A) are not helpful in benchmarking or particularly useful in identifying opportunity, I don't doubt they have some merit for other purposes but given many businesses have now racked up massive debts I found it misleading to eliminate interest costs in the calc when comparing coy's as that interest cost will reduce free cash into the future.
Similarly DD&A is useful for new projects but unless all costs are included in the historical calc it can be a misleading number. Accts bury numbers in these calc's and therefore unless we know exactly what is/isn't included the number is only good for overview imo. In SSNs case I doubt the DD&A calc includes the offset for the $87m land sale so when judging past performance for me two calc's should really be looked at for completeness. SSN has spent roughly $120m over the last 5 years on exploration & development however a large amount of that was financed by the land sale which should also be considered. Both numbers will be correct but depending on the purpose of the analysis will also be incorrect.
Having said that, my way works for me but the thinking can change / adapt as more info becomes available, it may not be relevant to others and that is a personal choice.
Bw
- Forums
- ASX - By Stock
- SSN
- Ann: March 2015 Quarterly Report and Appendix 5B
Ann: March 2015 Quarterly Report and Appendix 5B, page-24
-
- There are more pages in this discussion • 5 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)