mutton dressed up as lamb!, page-9

It is very worthwhile being very cautious and doing you own sums - I may have got something wrong.

Marri - I'm very confident about two things, but do not disagree with you that there are risks.
1. The prospectus income predictions seem to be a load of rubbish. (In fact the prospectus is difficult to understand, they could have been nice enough to present historical data on each individual business to allow investors to make up their own minds). They are using an EBIT percentage return on assets of about 4% on the whole business (which historically has not been the case). A more suitable return after the writedowns that have occurred, and assuming that they can actually run the business with less distractions, is at least 5%, and probably 7% to cover a typical range from 5 to 9%. I think they have understated the underlying NPAT by about 50%, as they want to provide a doom and gloom scenario.

2. They'll have plenty of cash laying around on the balance sheet after this. Enough to repay some debts and still have spare cash. There is a pile of shareholders equity to plough through before my ELDPA's are on the chopping block.

That's my opinion.