Where’s Joe, page-46

Hi Fish, just had a quick look at the background to the Carollion collaspse. They were a once successful building company who took on a number of massive projects that had significant cost overruns and delays. They eventually had to write down the value of those projects. Subsequently they collapsed in on themselves under a huge mountain of debt in Jan'18. Prior to their collapse they had issued three profit warnings.
It appears that the 2016 accounts may have been the last of the 'ok' reports. It demonstrates what I have been saying. Operating cash flow to Ebitda should not be used a measure of solvency. You need to look at liquidity ratios, debt levels etc.
You can easily have a mountain of debt and still have a good Cash operating conversion ratio.
In the case of CTD debt levels are tiny and there is no suggestion that the businesses are overvalued. Indeed you could argue that because they have improved the profitability of those businesses they are way undervalued. Ironically the VGI report confirms the profitability of the CTD businesses has increased over time.