MSPNWA wrote:morrisond wrote:Pre-Max Boeing had very little debt. Share repurchases came from excess cash flow. Debt was only about $14B which is nothing for what Boeings revenues and profits were.
Their debt load pre-grounding was only about a year of free cash flow (Boeing has other substantial future retiree liabilities, but that isn't the same as debt). Paying back the owners from the profit is exactly what any small business would do as well. There was nothing wrong or unusual about how Boeing was conducting its business. Claiming that Boeing was loading up on debt to pay shareholders is simply false. Considering the language used, it appears it's only an emotional, ignorant opinion.Sokes wrote:If I have a house which is 500.000 $ worth and debt of 550.000 $ debt, is my debt 50.000$ or 550.000 $?
I believe you speak of negative equity, not of debt.
Morrisond was clearly talking about debt as the figure is consistent with Boeing's financial statements.
What it appears to me you're talking about is total liabilities. They are not the same thing. Debt is a liability. Not all liability is a debt.mjoelnir wrote:You use of course a very narrow definition of debt and of course avoid looking at liabilities and obligations.
And you have a inaccurate interpretation of debt by lumping all liabilities into the term.
Low or negative equity is simply not a certain sign of a financially weak company. It only means it could use a closer look. That closer look of Boeing shows us they were in an exceptionally strong financial position a couple years ago and are still in a strong position relative to the industry. They are the last company I would be worried about right now (and I know you're not worried about them). Every airline and subsequently every other manufacturer, including Airbus, are less secure financially. That's were my concerns are placed at the moment.
Debt, liabilities, obligations, just semantics. Liabilities is what you owe. You do not only have to pay your bank, but you also have to pay your suppliers.
Most of the debt is usually long term, you have time to raise or earn the cash.
Boeing has 97 billion USD of current liabilities to be served this year, including 15.5 billion Accounts payable (mostly suppliers), 22.9 billion Accrued liabilities, 55.6 billion Advances and progress billings and 7.3 billion Short-term debt and current portion of long-term debt.
Current liabilities have to be served this year. So Boeing has to provide the cash 45.7 billion,for suppliers and so on, and deliver the frames 55.6 billion, to cover the prepayments. If Boeing can not deliver all the frames, than part of the 55.6 billions have to be repaid also in cash. The 55.6 billion Boeing owes to the customers, money already payed for the ordered frames.
I would assume that you do not run a company, if you assume that liabilities do not way as heavy as debt.