Car crash, page-28

Interesting comments. You do realise that the goodwill value is very typical of most services businesses.
If you were to buy an accounting firm for instance you would pay an edit multiple of say 5 X . Lets say bit was $100K and the value for the business was then $500K . What assets would you buy with the business.
% computers, a printer, some furniture and a phone system. Lets say that came to $100K. Good will on the purchasing company balance sheet would be $400K. A simple example however quite representative of GXL as it purchases both vet clinics and the odd retail outlet. Also, not unreasonable for GXL to revalue the startup sites they have in Pet Barn and Vet to reflect the ebit premium over the asset cost base.

So the shed load of intangibles frankly is typical of these types of businesses. The real measure tag should be looked at is in fact the revenue and profit volatility and the debt cover ratios.

Lets quickly have a look at the Altman Z analysis. An elegant formulae however is it significant again in this type of business. What the Altman Z does not take into account is volatility. Vet clinics, Pet supplies such as GXL have are by my understanding low beta risk. Vet clinics, Pet stores, Plant Nurseries and things like perfume typically remain resilient in economic downturn. People will tend toward comfort expenditure to cover other economic stresses. The dog is very important in the family as in mum buying a simple discretionary purchase of perfume and a pot plant.

So my point is that I don't see any real downside in the GXL business. How does this reflect into share prices. No idea. The market seems to run on irrational logic and sentiment. Time will tell.